Insider Weekends – CEO of RH Buys $1 Million Worth of Stock

Welcome to edition 380 of Insider Weekends. Insider buying decreased last week with insiders purchasing $47.6 million of stock compared to $78.5 million in the week prior. Selling also decreased with insiders selling $772.2 million of stock last week compared to $1.02 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 went up to 16.22. In other words, insiders sold more than 16 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 13.04.

Insider Sell Buy Ratio September 29, 2017

Insider Sell Buy Ratio September 29, 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. Tiffany & Co. (TIF): $91.78

Shares of this luxury jewelry retailer were acquired by 3 insiders:

  • Director Francesco Trapani acquired 25,000 shares, paying $89.34 per share for a total amount of $2.23 million. These shares were purchased indirectly by Argenta Holdings Sarl, which is 100% owned by Mr. Trapani.
  • Director Roger N. Farah acquired 10,000 shares, paying $88.86 per share for a total amount of $888,585. Mr. Farah increased his stake by 865.05% to 11,156 shares with this purchase.
  • Director Robert S. Singer acquired 1,000 shares, paying $88.13 per share for a total amount of $88,129. Mr. Singer increased his stake by 8.29% to 13,061 shares with this purchase.

Mr. Trapani also purchased $11.11 million worth of Tiffany stock last month and we wrote the following after that purchase:

Mr. Trapani was the CEO of Italian luxury goods retailer Bulgari from 1984 until its sale to LVMH in 2011. LVMH operates a collection of luxury “houses” or brands including Louis Vuitton, Fendi, Bvlgari and Tag Heuer. Mr. Trapani joined the board of Tiffany earlier this year when the company expanded its board of directors from 10 to 13 members in an agreement with activist hedge fund JANA Partners.

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

P/E: 24.94 Forward P/E: 21.29 Industry P/E: 12.58
P/S: 2.83 Price/Book: 3.64 EV/EBITDA: 11.36
Market Cap: $11.42B Avg. Daily Volume: 1,570,185 52 Week Range: $70.86 – $97.29

2. Revlon, Inc. (REV): $24.55

Director Ronald O. Perelman acquired 106,784 shares of this beauty care products company, paying $20.56 per share for a total amount of $2.19 million. These shares were purchased indirectly through MacAndrews & Forbes Incorporated and related entities.

Revlon’s stock shot up 38% last week before giving back some of those gains on Friday and ending the week up 23%. We discussed Mr. Perelman continuing to buy stock even after a minority shareholder wrote this letter to the CEO and the board urging them to obtain a standstill agreement from Mr. Perelman so that he does not increase his stake to 90% and then attempt to take the company private via a short-form merger.

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

P/E: -11.17 Forward P/E: N/A Industry P/E: 12.58
P/S: 0.49 Price/Book: -1.95 EV/EBITDA: 12.76
Market Cap: $1.29B Avg. Daily Volume: 355,820 52 Week Range: $15.60 – $37.43

3. BIO-key International, Inc. (BKYI): $2.86

Managing Director, BIO-key HK Fong Wong Kwok acquired 427,778 shares of this biometric technology  company, paying $3.60 per share for a total amount of $1.54 million. Mr. Kwok increased his stake by 31.59% to 1,781,815 shares with this purchase.

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

P/E: -3.04 Forward P/E: -7.15 Industry P/E: 12.58
P/S: 4.18 Price/Book: 1.38 EV/EBITDA: -4.45
Market Cap: $18.59M Avg. Daily Volume: 14,164 52 Week Range: $0.13 – $3.67

4. RH (RH): $70.32

Chairman & CEO Gary G. Friedman acquired 13,959 shares of the company formerly known as Restoration Hardware, paying $71.64 per share for a total amount of $1 million. Mr. Friedman increased his stake by 0.63% to 2,235,410 shares with this purchase.

Mr. Friedman also purchased nearly a $1 million worth of stock in mid-September, a day after the stock shot up 45% on improved full-year outlook from this retailer. On an unrelated note, Mr. Friedman shared an interesting anecdote at the Goldman Sachs Global Retailing Conference last month related to Google adwords advertising that @parsimony16 posted on Twitter.

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

P/E: 184.08 Forward P/E: 21.77 Industry P/E: 12.58
P/S: 0.64 Price/Book: 3.73 EV/EBITDA: 15.48
Market Cap: $1.49B Avg. Daily Volume: 1,962,961 52 Week Range: $24.41 – $79.91

5. L Brands, Inc. (LB): $41.61

Director Allan R. Tessler acquired 20,000 shares of this apparel chain, paying $37.00 per share for a total amount of $739,988. These shares were purchased indirectly through a trust and by the Tessler Family Limited Partnership.

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

P/E: 12.21 Forward P/E: 12.65 Industry P/E: 12.58
P/S: 0.96 Price/Book: -13.02 EV/EBITDA: 6.7
Market Cap: $11.81B Avg. Daily Volume: 4,758,843 52 Week Range: $35 – $75.5

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

Notable Insider Sales:

1. Wal-Mart Stores, Inc. (WMT): $78.14

Shares of Wal-Mart were sold by 2 insiders:

  • Director Robson S. Walton sold 2,000,000 shares for $79.47, generating $158.93 million from the sale. These shares were sold indirectly through a trust.
  • Executive Vice President Jacqueline P. Canney sold 1,586 shares for $79.00, generating $125,299 from the sale.

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

P/E: 18.77 Forward P/E: 16.88 Industry P/E: 12.58
P/S: 0.48 Price/Book: 3.08 EV/EBITDA: 8.49
Market Cap: $233.42B Avg. Daily Volume: 8,028,067 52 Week Range: $65.28 – $81.99

2. Barracuda Networks, Inc. (CUDA): $24.23

Director Michael D. Perone sold 455,980 shares of this security and storage solutions provider for $24.12, generating $10.99 million from the sale. 52,500 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 Barracuda Networks, Inc. here.

P/E: 127.53 Forward P/E: 27.85 Industry P/E: 12.58
P/S: 3.56 Price/Book: 122.99 EV/EBITDA: 29.1
Market Cap: $1.28B Avg. Daily Volume: 793,927 52 Week Range: $19.06 – $26.69

3. RealPage, Inc. (RP): $39.9

Chairman President & CEO Stephen T. Winn sold 255,254 shares of this application software company for $39.93, generating $10.19 million from the sale. 165,915 of these shares were sold indirectly through various trusts and other entities.

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

P/E: 12.20 Forward P/E: 34.10 Industry P/E: 12.58
P/S: 5.41 Price/Book: 6.31 EV/EBITDA: 35.28
Market Cap: $3.3B Avg. Daily Volume: 548,606 52 Week Range: $23.69 – $43.65

4. The Williams Companies, Inc. (WMB): $30.01

Shares of this integrated natural gas company were sold by 2 insiders:

  • Sr. Vice President & CFO Donald R. Chappel sold 272,088 shares for $30.32, generating $8.25 million from the sale.
  • Senior Vice President Robyn L. Ewing sold 9,913 shares for $29.99, generating $297,250 from the sale.

You can view the list of recent insider transactions for The Williams Companies, Inc. here.

P/E: 47.33 Forward P/E: 30.01 Industry P/E: 12.58
P/S: 3.1 Price/Book: 2.98 EV/EBITDA: 12.65
Market Cap: $24.81B Avg. Daily Volume: 4,398,888 52 Week Range: $27.35 – $32.69

5. Interactive Brokers Group, Inc. (IBKR): $45.04

Shares of this investment brokerage were sold by 3 insiders:

  • Chief Information Officer Thomas A. J. Frank sold 97,092 shares for $44.01, generating $4.27 million from the sale. These shares were sold indirectly by IBG Holdings LLC.
  • Chief Financial Officer Paul Jonathan Brody sold 33,516 shares for $44.00, generating $1.47 million from the sale. These shares were sold indirectly by IBG Holdings LLC.
  • Vice Chairman Earl H. Nemser sold 4,845 shares for $44.01, generating $213,216 from the sale. These shares were sold indirectly by IBG Holdings LLC.

You can view the list of recent insider transactions for Interactive Brokers Group, Inc. here.

P/E: 43.98 Forward P/E: 28.69 Industry P/E: 12.58
P/S: 13.65 Price/Book: 3.02 EV/EBITDA: -27.11
Market Cap: $18.6B Avg. Daily Volume: 496,687 52 Week Range: $31.97 – $45.08

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

Disclaimer: I hold a long position in L Brands (LB). 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria

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