Insider Weekends – Cluster Purchase by the Insiders of Coty

Welcome to edition 377 of Insider Weekends. Insider buying increased last week with insiders purchasing $71.05 million of stock compared to $43.33 million in the week prior. Selling on the other hand declined with insiders selling $930.04 million of stock last week compared to $1.31 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 13.09. In other words, insiders sold more than 13 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 30.31.

Insider Sell Buy Ratio September 8, 2017

Insider Sell Buy Ratio September 8, 2017

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. Builders FirstSource, Inc. (BLDR): $16.63

Director Paul S. Levy acquired 800,000 shares of this building materials company, paying $16.17 per share for a total amount of $12.94 million. Mr. Levy increased his stake by 411.24% to 994,533 shares with this purchase.

These shares were acquired by Mr. Levy in a 13.48 million shares secondary offering by JLL Building Holdings. Mr. Levy is a Senior Managing Director of affiliates of JLL and is also Chairman of the Board of Builders FirstSource. He founded the private equity firm JLL Partners in 1988 and has been on the board of Builders FirstSource since 1998.

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

P/E: 11.01 Forward P/E: 11.39 Industry P/E: 12.28
P/S: 0.28 Price/Book: 5.1 EV/EBITDA: 10.03
Market Cap: $1.87B Avg. Daily Volume: 926,684 52 Week Range: $9.04 – $17.22

2. Lands’ End, Inc. (LE): $12.45

Shares of this apparel retailer were acquired by 3 insiders:

  • 10% Owner Edward S. Lampert acquired 752,349 shares, paying $12.54 per share for a total amount of $9.43 million.
  • CEO and President Jerome Griffith acquired 20,000 shares, paying $11.47 per share for a total amount of $229,404. Mr. Griffith increased his stake by 32.41% to 81,717 shares with this purchase.
  • EVP, CAO & General Counsel Peter L. Gray acquired 2,200 shares, paying $11.36 per share for a total amount of $24,992. Mr. Gray increased his stake by 24444.44% to 2,209 shares with this purchase.

You can view the list of recent insider transactions for Lands’ End, Inc. here.

P/E: -3.56 Forward P/E: 38.91 Industry P/E: 12.28
P/S: 0.3 Price/Book: 1.51 EV/EBITDA: 18.88
Market Cap: $399.58M Avg. Daily Volume: 268,030 52 Week Range: $11.2 – $24.8

3. Coty Inc. (COTY): $16.47

Shares of this cosmetics company were acquired by 4 insiders:

  • President, Consumer Beauty Laurent Kleitman acquired 120,000 shares, paying $16.50 per share for a total amount of $1.98 million. Mr. Kleitman increased his stake by 193.55% to 182,000 shares with this purchase.
  • Chief Legal Officer Greerson Greene McMullen acquired 62,218 shares, paying $16.50 per share for a total amount of $1.03 million. Mr. McMullen increased his stake by 62.53% to 161,725 shares with this purchase.
  • Director Robert S. Singer acquired 20,000 shares, paying $16.51 per share for a total amount of $330,200. Mr. Singer increased his stake by 18.18% to 130,000 shares with this purchase.
  • Chief Human Resources Officer Sebastien Froidefond acquired 16,879 shares, paying $16.60 per share for a total amount of $280,191. Mr. Froidefond increased his stake by 20.72% to 98,358 shares with this purchase.

This is the second week in a row Coty has made our list and insiders have been consistently purchasing stock since February 2017. Following purchases by the CEO and the Chief Legal Officer at prices ranging from $18.50 to $19.54 earlier this year we wrote the following,

Coty has seen its stock drop more than 34% over the last year, underperforming the S&P 500 by more than 57%. With a leveraged balance sheet, declining revenue and the stock trading at over 23 times EBITDA, it is difficult to understand why insiders are buying even at these levels.

Obviously the insiders and the market have divergent views of the company. While looking into the company further last week, I noticed that Michael Burry (of The Big Short fame), had almost a third of his equity portfolio in Coty as of Q3 2016. Scion Asset Management has not filed a 13F form with the SEC since then and so we don’t know if he kept this position, added to it or sold it.

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

P/E: -24.95 Forward P/E: 16.64 Industry P/E: 12.28
P/S: 1.61 Price/Book: 1.32 EV/EBITDA: 20.89
Market Cap: $12.33B Avg. Daily Volume: 5,937,871 52 Week Range: $15.83 – $25.34

4. Tiffany & Co. (TIF): $93.16

Director Francesco Trapani acquired 25,000 shares of this luxury jewelry retailer, paying $91.84 per share for a total amount of $2.29 million. These shares were purchased indirectly by Argenta Holdings Sarl.

Mr. Trapani also acquired $11.11 million worth of Tiffany stock last week.

You can view the list of recent insider transactions for Tiffany & Co. here.

P/E: 25.3 Forward P/E: 21.61 Industry P/E: 12.28
P/S: 2.87 Price/Book: 3.69 EV/EBITDA: 12.56
Market Cap: $11.6B Avg. Daily Volume: 1,435,538 52 Week Range: $66.35 – $97.29

5. American Assets Trust, Inc. (AAT): $40.72

Chairman, CEO & President Ernest S. Rady acquired 46,834 shares of this diversified REIT, paying $40.79 per share for a total amount of $1.91 million. These shares were purchased indirectly by American Assets, Inc.

You can view the list of recent insider transactions for American Assets Trust, Inc. here.

P/E: 61.88 Forward P/E: 53.58 Industry P/E: 12.28
P/S: 8.76 Price/Book: 2.29 EV/EBITDA: 21.94
Market Cap: $2.62B Avg. Daily Volume: 218,669 52 Week Range: $37.54 – $44.83

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

Notable Insider Sales:

1. Wal-Mart Stores, Inc. (WMT): $78.88

Director Robson S. Walton sold 1,652,342 shares of Wal-Mart for $79.35, generating $131.11 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Wal-Mart Stores, Inc. here.

P/E: 18.95 Forward P/E: 17.04 Industry P/E: 13.71
P/S: 0.48 Price/Book: 3.11 EV/EBITDA: 8.70
Market Cap: $235.63B Avg. Daily Volume: 9,071,690 52 Week Range: $65.28 – $81.99

2. Intuit Inc. (INTU): $141.56

Shares of this accounting and tax software company were sold by 3 insiders:

  • Chair of Executive Committee Scott D. Cook sold 183,333 shares for $141.16, generating $25.88 million from the sale. These shares were sold indirectly by trusts.
  • EVP, Consumer Group Daniel A. Wernikoff sold 15,415 shares for $141.33, generating $2.18 million from the sale.
  • EVP & Chief Technology Officer Henry Tayloe Stansbury sold 15,415 shares for $141.27, generating $2.18 million from the sale.

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

P/E: 38.05 Forward P/E: 25.41 Industry P/E: 12.28
P/S: 6.97 Price/Book: 26.87 EV/EBITDA: 21.77
Market Cap: $36.09B Avg. Daily Volume: 1,300,419 52 Week Range: $103.22 – $143.81

3. Glaukos Corporation (GKOS): $42

Shares of this ophthalmic medical technology company were sold by 5 insiders:

  • Director Jonathan Silverstein sold 580,200 shares for $38.73, generating $22.47 million from the sale. These shares were sold indirectly by OrbiMed Private Investments.
  • Chief Executive Officer Thomas William Burns sold 75,000 shares for $41.36, generating $3.1 million from the sale.

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

P/E: -1 Forward P/E: 82.35 Industry P/E: 12.28
P/S: 10.33 Price/Book: 11.48 EV/EBITDA: 171.72
Market Cap: $1.45B Avg. Daily Volume: 527,057 52 Week Range: $28.72 – $52.49

4. NVIDIA Corporation (NVDA): $163.69

Shares of this semiconductor company were sold by 3 insiders:

  • President and CEO Jen Hsun Huang sold 110,000 shares for $166.08, generating $18.27 million from the sale.
  • Director Brooke A. Seawell sold 30,000 shares for $170.19, generating $5.11 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Principal Accounting Officer Michael Byron sold 409 shares for $171.01, generating $69,943 from the sale.

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

P/E: 47.08 Forward P/E: 41.55 Industry P/E: 12.28
P/S: 11.77 Price/Book: 16.44 EV/EBITDA: 35.69
Market Cap: $98.21B Avg. Daily Volume: 19,049,442 52 Week Range: $57.32 – $174.56

5. MGM Resorts International (MGM): $33.25

Shares of this casino operator were sold by 6 insiders:

  • Chairman & CEO James Murren sold 294,150 shares for $34.08, generating $10.02 million from the sale. These shares were sold indirectly through a trust.
  • EVP – Chief Accounting Officer Robert Selwood sold 40,325 shares for $33.86, generating $1.37 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President & CFO Daniel D’Arrigo sold 30,318 shares for $34.12, generating $1.03 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Operating Officer Corey Ian Sanders sold 16,446 shares for $33.63, generating $553,133 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP General Counsel and Secy John McManus sold 5,273 shares for $33.70, generating $177,701 from the sale.
  • Director Rose McKinney-james sold 3,097 shares for $33.83, generating $104,779 from the sale.

You can view the list of recent insider transactions for MGM Resorts International here.

P/E: 19.69 Forward P/E: 20.91 Industry P/E: 13.71
P/S: 1.93 Price/Book: 2.94 EV/EBITDA: 13.47
Market Cap: $19.13B Avg. Daily Volume: 9,414,285 52 Week Range: $24.26 – $34.65

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

Disclaimer: 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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