Insider Weekends – December 23, 2011

Merry Christmas and welcome to edition eighty one of Insider Weekends. Insider buying increased with insiders purchasing $58.41 million of their stock last week compared to $49.7 million in the week prior. Selling also increased with insiders selling $1.06 billion worth of stock last week compared to $951.5 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 purchases that week. The adjusted ratio for last week dropped to 18.11. In other words, insiders sold more than 18 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 19.1.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.

Note: As mentioned in the first post in this series Introduction to Insider Weekends, 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. Och-Ziff Capital Management Group LLC (OZM): $8.62

Shares of this alternative asset management company were acquired by 4 insiders:

• Executive Managing Director David Windreich acquired 401,670 shares, paying $8.25 per share for a total amount of $3.31 million.
• Chief Executive Officer Daniel Och acquired 273,799 shares, paying $7.87 per share for a total amount of $2.15 million. Mr. Och increased his stake by 23.78% to 1,425,400 shares with this purchase.
• Director Barry J. Griswell acquired 20,000 shares, paying $7.83 per share for a total amount of $156,610.
• Executive Managing Director Michael L. Cohen acquired 6,920 shares, paying $7.87 per share for a total amount of $54,434. Mr. Cohen increased his stake by 16.17% to 49,720 shares with this purchase.

These purchases by Och-Ziff executives and directors follow the establishment of a 10b5-1 trading plan earlier this month under which insiders plan on purchasing as much as $20 million worth of class A shares. The stock trades very close to its 52 week low and sports a dividend yield of 4.6%. It is difficult to value asset management companies using traditional valuation metrics. The company’s market cap of $785 million is 2.72% of its $28.8 billion in asssets under management (AUM). In contrast Fortress Investment Group (FIG) trades at 1.41% of its $43.6 billion in AUM, BlackRock (BLK) trades at 0.88% of its $3.345 trillion in AUM and the beaten down Legg Mason (LM) trades for just 0.5% of AUM.

Och-Ziff will be the subject of our new weekly focus article sent to Insider Trade Reports subscribers on Mondays.

You can view the list of recent insider transactions for Och-Ziff Capital Management Group LLC here.

2. Seacor Holdings Inc. (CKH): $91.18

Chief Executive Officer Oivind Lorentzen acquired 45,500 shares of this services provider to the offshore oil and gas industry, paying $85.79 per share for a total amount of $3.90 million. Mr. Lorentzen increased his stake by 67.66% to 112,750 shares with this purchase.

23,000 of these shares were purchased directly by Mr. Lorentzen and the rest were purchased indirectly by several trusts, of which Mr. Lorentzen’s children are beneficiaries. Mr. Lorentzen is not a trustee of these trusts.

Over the course of the last year, besides Mr. Lorentzen, only one other insider picked up 2,300 shares in August. All other insider transactions have been sales or option exercises.

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

3. White Mountains Insurance Group, Ltd. (WTM): $447.75

Shares of this property & casualty insurance company were acquired by 2 insiders:

• Director Morgan W. Davis acquired 5,000 shares, paying $429.34 per share for a total amount of $2.15 million. Mr. Davis increased his stake by 31.08% to 21,090 shares with this purchase.
• Director Angelo Michael Frinquelli acquired 100 shares, paying $423.60 per share for a total amount of $42,360.

Mr. Morgan’s purchase is a little odd because he sold stock worth $2 million from his 401K account on November 29 and then turned around and directly purchased a similar quantity of shares three weeks later. The stock is not only close to a 52 week high but is also near its three year high and still trades just below tangible book value.

You can view the list of recent insider transactions for White Mountains Insurance Group, Ltd. here.

4. Kinder Morgan Management LLC (KMR): $77.12

Director Perry M. Waughtal acquired 17,500 shares of this oil & gas pipeline company, paying $74.92 per share for a total amount of $1.31 million. Mr. Waughtal increased his stake by 27.87% to 80,295 shares with this purchase.

You can view the list of recent insider transactions for Kinder Morgan Management LLC here.

5. United Therapeutics Corporation (UTHR): $46.56

CEO Martine A. Rothblatt acquired 11,823 shares of this biotech company, paying $43.92 per share for a total amount of $519,212.

United Therapeutics was the focus of our last weekly article based on Dr. Rothblatt’s purchases over the last two weeks. It is encouraging to see that she continued her purchases this week despite the increase in stock price.

Voluntary Disclosure: I have a long position in United Therapeutics.

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

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

Notable Insider Sales:

1. Toll Brothers Inc. (TOL): $20.13

Shares of this luxury home builder were sold by 2 insiders:

• Executive Chairman Robert I. Toll sold 1,000,000 shares for $20.56, generating $20.56 million from the sale.
• Director Carl B. Marbach sold 20,000 shares for $20.36, generating $407,110 from the sale.

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

2. Simon Property Group Inc. (SPG): $130.26

Chairman Emeritus of the Board Herbert Simon sold 153,827 shares of this retail REIT for $127.83, generating $19.66 million from the sale. These shares were sold indirectly from a trust.

You can view the list of recent insider transactions for Simon Property Group Inc. here.

3. SL Green Realty Corp. (SLG): $66.44

Shares of this retail REIT were sold by 2 insiders:

• Chief Executive Officer Marc Holliday sold 125,000 shares for $65.85, generating $8.23 million from the sale.
• President Andrew W. Mathias sold 30,386 shares for $66.40, generating $2.02 million from the sale.

You can view the list of recent insider transactions for SL Green Realty Corp. here.

4. Cobalt International Energy, Inc. (CIE): $15.85

Shares of this oil exploration company were sold by 3 insiders:

• Chief Exploration Officer James W. Farnsworth sold 400,000 shares for $14.63, generating $5.85 million from the sale.
• EVP and COO Van P. Whitfield sold 56,588 shares for $15.51, generating $877,746 from the sale.
• VP, Gov’t and Public Affairs Lynne L. Hackedorn sold 20,000 shares for $16.07, generating $321,400 from the sale.

You can view the list of recent insider transactions for Cobalt International Energy, Inc. here.

5. PVH Corp. (PVH): $70.25

Shares of this apparel company were sold by 3 insiders:

• CEO of Tommy Hilfiger Fred Gehring sold 60,562 shares for $65.70, generating $3.98 million from the sale.
• Executive VP and CFO Michael A. Shaffer sold 41,750 shares for $68.29, generating $2.85 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Director Bruce Maggin sold 4,000 shares for $69.64, generating $278,572 from the sale. 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 PVH Corp. here.

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