Insider Weekends – January 20, 2012

Welcome to edition eighty five of Insider Weekends. Insider buying declined sharply with insiders purchasing $28.83 million of their stock last week compared to $88.3 million in the week prior. Selling on the other hand increased with insiders selling $580.05 million worth of stock last week compared to $368.3 million in the week prior.

While Carl Icahn, Eddie Lampert and Sardar Biglari continued their purchases of WebMD (WBMD), Sears Holdings (SHLD) and Cracker Barrel (CBRL) respectively, their purchases were smaller than those we reported last week. Sears Holding in particular has been on fire since Mr. Lampert started buying, making it the largest percentage gainer in the S&P 500 in 2012 with a 54% gain since the start of the year.

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 jumped to 20.12. In other words, insiders sold more than 20 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 4.2.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. GeoEye, Inc. (GEOY): $22.04

We normally don’t include purchases by 10% owners but I decided to make an exception this week to highlight Stephen Feinberg’s purchases of GeoEye through his fund Cerberus Capital Management.

He picked up 385,000 shares of this satellite imaging products company, paying $21.50 per share for a total amount of $8.28 million. As you can see from this page, Cerberus has been consistently buying shares since November.

The stock trades for 1.21 times tangible book value and less than 5 times EBITDA.

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

2. Sears Holdings Corporation (SHLD): $49

Director Eddie S. Lampert acquired 105,650 shares of this retail chain, paying $31.20 per share for a total amount of $3.3 million. Mr. Lampert increased his stake by 0.47% to 22,747,453 shares with this purchase.

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

3. Incyte Corporation (INCY): $17.28

Shares of this drug discovery and development company were acquired by 2 insiders:

• Director Julian Baker acquired 557,864 shares, paying $16.37 per share for a total amount of $9.13 million. These shares were acquired indirectly through Baker Brothers Life Sciences Capital and 14159 Capital, LLC.
• Director Paul A. Brooke acquired 50,000 shares, paying $17.70 per share for a total amount of $884,750. Mr. Brooke increased his stake by 50.00% to 150,000 shares with this purchase.

The FDA approved Incyte’s drug Jakafi (ruxolitinib) for patients with a bone marrow disorder called Myelofibrosis in mid-November. The 17 analysts that follow the company expect it to report revenue of $204.32 million in 2012 (an estimated 125% increase year-over-year) and a loss of 94 cents per share.

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

4. Urstadt Biddle Properties Inc. (UBP): $16.8935

Chairman of the Board and CEO Charles J. Urstadt acquired 32,627 shares of this commercial REIT, paying $16.45 per share for a total amount of $536,714.

These shares were acquired indirectly through Urstadt Property Company, Inc of which Mr. Urstadt is Chairman and a controlling shareholder.

You can view the list of recent insider transactions for Urstadt Biddle Properties Inc. here.

5. Franklin Covey Co. (FC): $8.67

Director Joel Clinton Peterson acquired 21,240 shares of this training and consulting services company, paying $8.25 per share for a total amount of $175,230. Mr. Peterson increased his stake by 9.10% to 254,612 shares with this purchase.

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

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

Notable Insider Sales:

1. AutoZone Inc. (AZO): $347

Shares of this auto parts retailer were sold by 2 insiders:

• 10% owner Eddie Lampert (of Sears Holdings fame) sold 702,698 shares for $345.98, generating $243.12 million from the sale. 264,952 of these shares were sold directly and the rest were sold indirectly through ESL Investments.

• Director William C. Crowley sold 2,528 shares of this Auto Parts Stores company for $346.03, generating $874,751 from the sale. 870 of these shares were sold directly and the rest were sold indirectly through Tynan, LLC.

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

2. Apollo Group Inc. (APOL): $54.61

Shares of this for-profit education company sold by 2 insiders:

• Executive Chairman of the Board John G. Sperling sold 250,000 shares for $57.09, generating $14.27 million from the sale. There shares were sold indirectly through the John Sperling Revocable Trust.
• Vice Chairman of the Board Peter V. Sperling sold 150,000 shares for $57.26, generating $8.59 million from the sale.

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

3. Monster Beverage Corporation (MNST): $104.52

Shares of this beverages company were sold by 2 insiders:

• Chairman and CEO Rodney C. Sacks sold 187,109 shares for $100.53, generating $18.81 million from the sale.
• Vice Chairman and President Hilton H. Schlosberg sold 157,109 shares for $100.47, generating $15.78 million from the sale.

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

4. Seagate Technology PLC (STX): $20.02

Shares of this data storage products company were sold by 4 insiders:

• Chairman, President and CEO Stephen J. Luczo sold 650,956 shares for $19.99, generating $13.01 million from the sale. 20,000 of these shares were sold as a result of exercising options immediately prior to the sale and the rest were sold indirectly from a trust.
  
• EVP & Chief Technical Officer Robert W. Whitmore sold 50,000 shares for $19.95, generating $997,500 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• EVP,General Counsel, CAO Kenneth M. Massaroni sold 20,000 shares for $19.60, generating $392,000 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• EVP, Sales and Marketing William D. Mosley sold 20,000 shares for $20.00, generating $400,000 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 Seagate Technology PLC here.

5. SYNNEX Corp. (SNX): $35.9

Shares of this business services provider were sold by 2 insiders:

• Director Matthew Miau sold 304,000 shares for $35.44, generating $10,773,580 from the sale. 20,000 of these shares were sold as a result of exercising options immediately prior to the sale and the rest were sold indirectly through Silver Star Developments and Peer Developments.
• Director Horne James Van sold 3,000 shares for $34.26, generating $102,794 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 SYNNEX Corp. here.

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