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Insider Weekends – August 20, 2010

  • August 22, 2010

Welcome to edition eleven of Insider Weekends. Insider buying increased last week with insiders purchasing $45.76 million of their stock when compared to $33.42 million in the week prior. Selling also increased significantly with insiders selling $1.01 billion worth of stock when compared to $820.41 million 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 buying in that week. The adjusted ratio for last week dropped to 22.04. In other words, insiders sold almost 22 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 24.55. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio August 20 2010

Notable Insider Buys:

1. Calumet Specialty Products Partners LP (CLMT): $17.51

President and CEO William Ferdinand Grube acquired 775,000 shares of this specialty hydrocarbon products company, paying $17.65 per share for a total amount of $13.68 million.

This is by far the largest insider purchase we have seen in recent weeks. The purchase was actually made indirectly through a company called AEG Associates II, LLC. I looked up AEG Associates II on the Indiana Secretary of State website and found that the registered agent for both AEG Associates and AEG Associates II is Janet Krampe Grube, the wife of F. William Grube.

Besides this large purchase by Mr. Grube, two other insiders also purchased shares in May following a sharp decline in the stock price from nearly $22 to $15.49 in early May. EVP Jennifer Straumins purchased 15,600 shares for $255,030 and Director George C. Morris III purchased 23,500 shares for $421,580. Jennifer Straumins is Mr. Grube’s daughter.

Calumet Specialty Products is a Master Limited Partnership (MLP) with a 10.4% yield. MLPs are supposed to pay out 85 to 90% of their income as distributions to shareholders and shareholders are responsible for taxes instead of the corporation. If you are not familiar with MLPs and why investing in them in retirement accounts is not recommended, please check out this section of the November 2008 InsideArbitrage.

P/E: N/AForward P/E: 12.6Industry P/E: 16.26
P/S: 0.31Price/Book: 1.52EV/EBITDA: 10.7
Market Cap: $617.74MAvg. Daily Volume: 115,85152 Week Range: $13.3 – $23.93

2. Continental Resources Inc. (CLR): $41.31

Shares of this producer of crude oil and natural gas, were purchased by two insiders:

  • CEO & Chairman Harold Hamm acquired 40,000 shares, paying $42.63 per share for a total amount of $1.71 million
  • Sr. Vice President, Operations Richard Muncrief acquired 1,000 shares, paying $42.66 per share for a total amount of $42,660
P/E: 27.2Forward P/E: 19.04Industry P/E: 17.17
P/S: 8.66Price/Book: 5.88EV/EBITDA: 11.64
Market Cap: $7.02BAvg. Daily Volume: 898,11252 Week Range: $33.86 – $52.53

3. CME Group Inc. (CME): $237.69

Director William Shepard acquired 5,000 shares of this national investment brokerage company, paying $245 per share for a total amount of $1.22 million

P/E: 17.23Forward P/E: 13.67Industry P/E: 17.81
P/S: 5.73Price/Book: 0.81EV/EBITDA: 9.52
Market Cap: $15.98BAvg. Daily Volume: 726,07852 Week Range: $236.58 – $353.03

4. Emeritus Corp. (ESC): $16.14

Chairman & Co-CEO Daniel Baty acquired 50,000 shares of this operator of senior living communities, paying $16.12 per share for a total amount of $806,010.

P/E: N/AForward P/E: N/AIndustry P/E: 14.4
P/S: 0.69Price/Book: 2.11EV/EBITDA: 15.46
Market Cap: $634.12MAvg. Daily Volume: 156,16252 Week Range: $14.55 – $24.83

5. Devon Energy Corporation (DVN): $62.14

Director Duane Radtke acquired 10,000 shares of this independent energy company, paying $63.24 per share for a total amount of $632,392. Mr. Radtke was appointed to the board of directors on August 16 and hence I would not read too much into this purchase.

P/E: 9.02Forward P/E: 9.8Industry P/E: 19.08
P/S: 3.09Price/Book: 1.64EV/EBITDA: 5.29
Market Cap: $27.03BAvg. Daily Volume: 4,599,22052 Week Range: $58.58 – $76.79

Notable Insider Sales:

1. Crown Castle International Corp. (CCI): $40.6

Director David Abrams sold 2,099,748 shares of this wireless communications tower company for $40 per share generating $84 million. This is the third week in a row that Mr. Abrams has indirectly liquidated shares. Another director Robert McKenzie also sold $1.2 million worth of stock last week but that was an options related sale.

P/E: N/AForward P/E: 112.78Industry P/E: 16.03
P/S: 6.65Price/Book: 4.75EV/EBITDA: 17.49
Market Cap: $11.79BAvg. Daily Volume: 2,169,96052 Week Range: $25.79 – $41.44

2. Mercadolibre, Inc. (MELI): $69.66

Two insiders sold shares of this Argentinian e-commerce and payments provider:

  • Director Anton Levy sold 612,043 shares generating $42.35 million at an average selling price of $69.20. The last time Mr. Levy sold stock was in mid-June when he liquidated $40.67 million worth of stock at an average selling price of $58.03.
  • SVP – Payments Gimenez Osvaldo sold 4,149 shares for $69.92, generating $290,098 from the sale.
P/E: 72.49Forward P/E: 44.94Industry P/E: 19.66
P/S: 15.08Price/Book: 22.34EV/EBITDA: 40.25
Market Cap: $3.07BAvg. Daily Volume: 986,06352 Week Range: $29.6 – $70.32

3. Boston Properties Inc. (BXP): $81.23

Three insiders sold shares of this office REIT that yields just 2.5%:

  • Chairman and CEO Mortimer Zuckerman sold 406,089 shares, generating $33.08 million at an average selling price of $81.45.
  • Senior Vice President Robert Pester sold 10,912 shares for $83.43, generating $910,355.
  • CFO Michael Labelle sold 2,123 shares for $81.32, generating $172,643 from the sale.
P/E: 48.58Forward P/E: 18.25Industry P/E: 49.74
P/S: 7.28Price/Book: 2.55EV/EBITDA: 17.72
Market Cap: $11.32BAvg. Daily Volume: 1,617,70052 Week Range: $55.85 – $86.08

4. Aircastle LTD (AYR): $8.3

Three insiders sold shares of this jet rental and leasing company:

  • Director Wesley Edens sold 3.9 million shares for $8.42, generating $32.84 million.
  • Chief Accounting Officer Aaron Dahlke sold 5,000 shares for $8.95, generating $44,750.
  • Director Ronald Merriman sold 4,500 shares for $8.95, generating $40,289.
P/E: 7.06Forward P/E: 7.61Industry P/E: 16.08
P/S: 1.16Price/Book: 0.51EV/EBITDA: 6.64
Market Cap: $659.61MAvg. Daily Volume: 542,14852 Week Range: $7.45 – $12.38

5. Medicis Pharmaceutical Corp. (MRX): $27.06

Four insiders sold shares of this dermatological and aesthetic products company:

  • CEO Jonah Shacknai. sold 400,000 shares for an average selling price of $26.55, generating $10.62 million.
  • President Mark Prygocki sold 114,986 shares for $26.27, generating $3.02 million. 71,529 of those shares were sold as a result of exercising options.
  • EVP, Sales and Marketing Vincent Ippolito sold 13,012 shares for $26.90, generating $349,969.
  • CFO Jeffrey Campbell sold 8,435 shares for $26.50, generating $223,528.
P/E: 13.27Forward P/E: 10.65Industry P/E: 16.51
P/S: 2.37Price/Book: 2.02EV/EBITDA: 5.16
Market Cap: $1.63BAvg. Daily Volume: 1,065,69052 Week Range: $17.86 – $28.15