Insider Weekends – July 2, 2010

  • July 4, 2010

Happy 4th of July and welcome to the fourth edition of Insider Weekends. We saw a significant drop in insider selling last week while insider buying more than doubled even after removing Carl Icahn’s purchase of Lions Gate Entertainment (LGF) stock.

Sell/Buy Ratio:

The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider buying in that week. The adjusted ratio for last week was just 2.55 despite a large options related sale by Safra Catz, the President of Oracle Corp (ORCL), who sold 750,000 shares generating  $16.48 million. In other words, insiders sold less than 3 times as much stock as they purchased. This compares very favorably with the week prior when the ratio stood at 43.46. We are calculating an adjusted ratio by removing transactions by funds and trying as best as possible only to retain information about insiders and 10% owners who are not funds.

Notable Insider Buys Last Week:

1. Agilysys (AGYS) $7.29

Once again this week, the biggest insider purchase if you don’t take into account stock offerings and Carl Icahn increasing his stake in Lions Gate, was the acquisition of 188,790 shares of this IT services provider by its Director Andrew Cueva for $1.32 million. Mr. Cueva, Managing Director of New York based hedge fund MAK Capital has served on the Agilysys board since June 2008.

Key Statistics:

P/E: 47.35Forward P/E: 21.44Industry P/E: 19.46
P/S: 0.25Price/Book: 0.79EV/EBITDA: 15.49
Market Cap: 167.2 millionAvg. Daily Volume:167,15552 Week Range:$3.95 – $12.50

2. Lennar Corp. (LEN) $13.65

Jonathan M. Jaffe, Vice President & COO of this home builder acquired 91,088 shares at $14.14 per share, paying $1.3 million. It is interesting to see this purchase even as the home builder confidence index plunged to 17 in June from a two year high of 22 in May.

Key Statistics:

P/E: N/AForward P/E: 17.06Industry P/E: 19.82
P/S: 0.86Price/Book: 1.07EV/EBITDA: 136.56
Market Cap: 2.52 billionAvg. Daily Volume: 7,301,82052 Week Range: $7.98 – $21.79

3. China Marine Food Group Limited (CMFO) $4.20

China Marine Food Group has been the subject of a number of critical and informative articles written by an anonymous short seller called “Chinese Company Analyst”. Check out his recent article titled “China Marine Food Group: Auditor’s Role in Another Alleged Fraud“. In light of those articles, it is very interesting to see the CEO Pengfei Liu purchase 190,500 shares of this food processing and packaging company paying $3.97 per share on the open market for a total of $756,855. Kent C McCarthy, a 10% owner also acquired 90,000 shares at $4.12 per share, paying $370,656.

Key Statistics:

P/E: 6.86Forward P/E: 4.00Industry P/E: N/A
P/S: 1.53Price/Book: 1.20EV/EBITDA: 3.89
Market Cap: 119.67 millionAvg. Daily Volume: 328,59252 Week Range: $3.07 – $8.63

4. Stein Mart (SMRT) $6.20

Chairman of the Board, Jay Stein acquired 80,000 shares of this retail apparel company at an average price of $6.25 per share, paying $500,451. President & CEO, David Stovall Jr. acquired 10,000 shares at $6.25 per share, paying $62,947.

Key Statistics:

P/E: 12.60Forward P/E: 7.85Industry P/E: 14.53
P/S: 0.22Price/Book: 1.16EV/EBITDA: 3.24
Market Cap: 268.94 millionAvg. Daily Volume: 211,34852 Week Range: $5.95 – $13.75

5. Pep Boys – Manny, Moe & Jack (PBY) $8.28

Director James A Mitarotonda acquired 35,000 of this automotive repair and maintenance provider at $8.94 per share, paying $313,037. EVP-CFO Raymond L Arthur acquired 11,800 shares at $8.4 per share, paying $99,120. President & CEO Michael Odell acquired 5,984 shares at $8.36 per share, paying $50,024 and EVP – Merchandising & Marketing Scott Webb acquired 5,000 shares at $8.47 per share, paying $42,350.

Key Statistics:

P/E: 18.16Forward P/E: 10.75Industry P/E: 18.31
P/S: 0.23Price/Book: 0.96EV/EBITDA: 4.80
Market Cap: 434.45 millionAvg. Daily Volume: 509,03852 Week Range: $7.76 – $13.42

Stein Mart and Pep Boys appear to be the most attractive candidates for further research. Another insider purchase worth mentioning is the acquisition of 500,000 shares of Champion Industries (CHMP) by its CEO Marshall Reynolds. The odd thing about this purchase is that 5 other members of the management team at Champion including the President, CFO and three Senior VPs sold exactly 100,000 shares each on the same day Mr. Reynolds acquired those 500,000 shares.

Notable Insider Sales Last Week:

1. Liberty Global (LBTYA) $26.04

CEO Michael Fries sold 50,000 shares of this broadband internet and telephone provider generating $1.35 million at a selling price of $26.92 per share. Senior VP Frederick Westerman III also sold 40,000 shares for $25.97 generating $1.04 million.

Key Statistics:

P/E: 11.14Forward P/E: N/AIndustry P/E: 14.97
P/S: 0.59Price/Book: 1.94EV/EBITDA: 5.23
Market Cap: 6.82 billionAvg. Daily Volume: 2,602,80052 Week Range: $14.46 – $29.85

2. Cavalo Growers (CVGW) $19.01

President, CEO and Chairman Lecil Cole sold 128,000 shares of this avacado and guacamole producer, generating $2.35 million at an average selling price of $18.36 per share.

Key Statistics:

P/E: 23.35Forward P/E: 14.08Industry P/E: 13.32
P/S: 0.76Price/Book: 3.4EV/EBITDA: 13.63
Market Cap: 278.5 millionAvg. Daily Volume: 63,95852 Week Range: $15.09 – $21.15

3. National Instruments Corporation (NATI) $30.78

President James Truchard sold 35,000 shares, generating $1.15 million at a selling price of 32.87. Director Jeffrey Kodosky sold 20,000 shares, generating $656,632 at an average selling price of $32.83 per share.

Key Statistics:

P/E: 68.71Forward P/E: 19.48Industry P/E: 26.92
P/S: 3.37Price/Book: 3.63EV/EBITDA: 21.7
Market Cap: 2.39 billionAvg. Daily Volume: 246,53852 Week Range: $21.20 – $36.98

4. ArcSight (ARST) $21.48

Executive VP and CTP Hugh Njemanze sold 30,000 shares of this enterprise security software company, generating $670,098 at a selling price of $22.34 per share. Senior VP of World Wide Field Operations Kevin Mosher also sold 30,000 shares, generating $671,264 at an average selling price of $22.37 per share. Director Ernest Von Simon sold 15,000 shares, generating 355,446 at a selling price of $23.70.

Key Statistics:

P/E: 27.4Forward P/E: 23.87Industry P/E: 21.61
P/S: 4.15Price/Book: 5.55EV/EBITDA: 26.29
Market Cap: 732.34 millionAvg. Daily Volume: 542,85552 Week Range: $14.23 – $29.33

5. Illumina (ILMN) $43.09

CEO Jay Flatley sold 30,000 shares of ILMN, generating $1.32 million at a selling price of $43.86 per share

Key Statistics:

P/E: 79.65Forward P/E: 32.64Industry P/E: 14.97
P/S: 7.53Price/Book: 5.54EV/EBITDA: 27.05
Market Cap: 5.25 billionAvg. Daily Volume: 1,581,61052 Week Range: $25.59 – $45.72

Voluntary Disclosure: I hold a long position in Lions Gate Entertainment.

Contributing author: Ann Kumar