Insider Weekends – The Battle for tronc Heats Up

Welcome to edition 353 of Insider Weekends. Insider buying increased with insiders buying $176.83 million of stock compared to $127.49 million in the week prior. Selling decreased with insiders selling $1.23 billion of stock last week compared to $2.46 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 6.94. In other words, insiders sold almost 7 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 19.31.

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. tronc, Inc. (TRNC): $13.71

Director Patrick Soon-Shiong acquired 2,950,000 shares of this newspapers and media company, paying $14.87 per share for a total amount of $43.87 million. These shares were purchased indirectly by NantCapital, LLC.

This was not an open market purchase but the motivation behind this large purchase made it interesting enough to include in this week’s edition of Insider Weekends. Following this purchase, Mr. Soon-Shiong and entities associated with him have increased their stake to nearly 25% of the company. This article does a great job of providing the background behind the battle between the CEO and Mr. Soon-Shiong to take control of tronc.

You can view the list of recent insider transactions for tronc, Inc. here.

2. Pulse Biosciences, Inc. (PLSE): $30.34

Shares of this medical device company were purchased by two insiders:

• 10% Owner Robert W. Duggan acquired 2015,127 shares, paying $23.45 per share for a total amount of $4.81 million.
• Director Maky Zanganeh acquired 18,240 shares, paying $23.34 per share for a total amount of $425,669. Mr. Zanganeh increased his stake by 7.42% to 263,935 shares with this purchase. 13,240 of these shares were purchased indirectly by a minor dependent.

You can view the list of recent insider transactions for Pulse Biosciences, Inc. here.

3. Sears Holdings Corporation (SHLD): $8.5

Chief Executive Officer Edward S. Lampert acquired 525,936 shares of this department stores chain, paying $7.93 per share for a total amount of $4.17 million. Mr. Lampert increased his stake by 1.68% to 31,842,833 shares with this purchase.

This was Mr. Lampert’s largest purchase of Sears in over a year. He has however purchased shares of Sears spin-offs like Sears Hometown & Outlet Stores (SHOS) and Land’s End (LE) several times over the last year.

You can view the list of recent insider transactions for Sears Holdings Corporation here.

4. Sonic Automotive, Inc. (SAH): $20.2

Shares of this automotive retailer were acquired by 2 insiders:

• Executive Chairman Bruton O. Smith acquired 100,000 shares, paying $20.14 per share for a total amount of $2.01 million. Mr. Smith increased his stake by 17.59% to 668,494 shares with this purchase.
• Director Eugene R. Taylor acquired 5,000 shares, paying $20.51 per share for a total amount of $102,572. Mr. Taylor increased his stake by 69.04% to 12,242 shares with this purchase.

You can view the list of recent insider transactions for Sonic Automotive, Inc. here.

5. Analog Devices, Inc. (ADI): $81.64

Director Bruce R. Evans acquired 25,000 shares of this semiconductor company, paying $83.12 per share for a total amount of $2.08 million. Mr. Evans increased his stake by 87.60% to 53,540 shares with this purchase.

You can view the list of recent insider transactions for Analog Devices, Inc. here.

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Facebook, Inc. (FB): $140.34

Shares of Faceebook were sold by 4 insiders:

• Director Jan Koum sold 432,769 shares for $140.91, generating $60.98 million from the sale. These shares were sold indirectly through a trust.
• COB and CEO Mark Zuckerberg sold 375,332 shares for $139.87, generating $52.49 million from the sale. These shares were sold indirectly through various entities.
• Chief Product Officer Christopher K. Cox sold 16,000 shares for $141.70, generating $2.27 million from the sale.
• VP and General Counsel Colin Stretch sold 750 shares for $141.39, generating $106,045 from the sale.

You can view the list of recent insider transactions for Facebook, Inc. here.

2. ServiceNow, Inc. (NOW): $84.81

Director Frederic B. Luddy sold 167,000 shares of this software-as-a-service provider for $85.02, generating $14.19 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for ServiceNow, Inc. here.

3. Marcus & Millichap, Inc. (MMI): $23.66

Shares of this brokerage company were sold by 2 insiders:

• Director George M. Marcus sold 512,643 shares for $24.50, generating $12.56 million from the sale.
• Chief Executive Officer Hessam Nadji sold 22,500 shares for $24.79, generating $557,794 from the sale.

You can view the list of recent insider transactions for Marcus & Millichap, Inc. here.

4. Brocade Communications Systems, Inc. (BRCD): $12.52

Chief Executive Officer Lloyd Carney sold 1,050,916 shares of this networking solutions provider for $12.47, generating $13.11 million from the sale. 572,499 of these shares were sold as a result of exercising options immediately prior to the sale.

Brocade is in the process of getting acquired by Broadcom (AVGO) for $12.75/share in an all cash deal as mentioned in our Merger Arbitrage Tool but it looks like the CEO doesn’t want to wait until the deal closes to sell some of his stake.

You can view the list of recent insider transactions for Brocade Communications Systems, Inc. here.

5. Lam Research Corporation (LRCX): $127.47

Executive Vice President Richard A. Gottscho sold 80,009 shares of this semiconductor company for $124.50, generating $9.96 million from the sale. 33,747 of these shares were sold as a result of exercising options immediately prior to the sale.

You can view the list of recent insider transactions for Lam Research Corporation here.

You can view the full list of sales from this Insider Sales page.

Disclaimer: I hold a long position in Sears Holdings (SHLD). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

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