Insider Weekends – March 30, 2012

Welcome to edition ninety five of Insider Weekends. Insider buying increased slightly with insiders purchasing $19.8 million of their stock last week compared to $19.6 million in the week prior. Selling on the other hand nearly doubled with insiders selling $1.4 billion worth of stock last week compared to $781.3 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 went up to 71.1. In other words, insiders sold more than 71 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 39.9. This is the highest the ratio has been since last October. 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, 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. Fortress Investment Group LLC (FIG): $3.56

Director David B. Barry acquired 400,000 shares of this investment management company, paying $3.47 per share for a total amount of $1.4 million. Mr. Barry increased his stake by 266.72% to 549,969 shares with this purchase.

It was interesting to see this filing come in late Friday evening. The last purchase by Mr. Barry was in March 2011 when he picked up 100,000 shares at an average price of $6.23. Investors have spurned Fortress and other private equity firms that went public partially because of their corporate structure where unit holders have little say in the way the company operates and partially because of their dismal performance. The stock sports a dividend yield of 5.8% after FIG reinstated a dividend of 5 cents per quarter in the fourth quarter of 2011.

You can view the list of recent insider transactions for Fortress Investment Group LLC here.

2. John B. Sanfilippo & Son, Inc. (JBSS): $12.47

Shares of this raw and processed nuts company were acquired by 4 insiders:

• Director Jasper B. Sanfilippo acquired 36,163 shares, paying $11.14 per share for a total amount of $402,856. Mr. Sanfilippo increased his stake by 24.85% to 181,707 shares with this purchase.
• 10% Owner John E. Sanfilippo acquired 28,152 shares, paying $11.14 per share for a total amount of $313,613.
• CEO Jeffrey T. Sanfilippo acquired 10,000 shares, paying $11.14 per share for a total amount of $111,400.
• COO, President Jasper Brian Sanfilippo acquired 5,531 shares, paying $11.14 per share for a total amount of $61,615.

Under normal circumstances we would have not reported on these transactions because they are not open market purchases but are essentially the transfer of stock between members of the SanFilippo family. Some members of the family are selling stock, while others picked up that stock and hence the same purchase price. However I decided to highlight these pseudo purchases when I noticed that the company was trading well below book value.

While the company has net debt on its balance sheet, it is also trading for just 0.72 times tangible book value. In fact the stock is almost a Benjamin Graham type net-net with one caveat. Current assets exceed total liabilities but if you discount the $155 million in inventory of nuts by 50%, the stock is no longer a net-net. With prices of nuts trending higher, it may not be necessary to discount the inventory by 50%, as you would in a traditional net-net situation. The company is also profitable albeit with low margins as is usually the case in the food business. The stock is close to a 52 week high but worth keeping on your radar.

You can view the list of recent insider transactions for John B Sanfilippo & Son Inc. here.

3. Opko Health, Inc. (OPK): $4.73

Shares of this medical appliances & equipment company were acquired by 2 insiders:

• CEO & Chairman Phillip Frost M.D. acquired 131,000 shares, paying $4.78 per share for a total amount of $625,613. These shares were purchased indirectly by Frost Gamma Investments Trust.
• Executive VP-Administration Steven D. Rubin acquired 2,000 shares, paying $4.68 per share for a total amount of $9,360. Mr. Rubin increased his stake by 0.05% to 4,191,168 shares with this purchase.

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

4. SandRidge Energy, Inc. (SD): $7.83

Director Daniel Jordan acquired 50,000 shares of this oil and gas exploration company, paying $7.73 per share for a total amount of $386,487. Mr. Jordan increased his stake by 3.28% to 1,573,266 shares with this purchase.

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

5. Paramount Gold and Silver Corp. (PZG): $2.26

Shares of this gold and silver exploration company were acquired by 2 insiders:

• CEO Christopher Crupi acquired 100,000 shares, paying $2.21 per share for a total amount of $221,123. Mr. Crupi increased his stake by 2.69% to 3,819,766 shares with this purchase.
• Chief Financial Officer Carlo Buffone acquired 20,000 shares, paying $2.20 per share for a total amount of $43,995.

You can view the list of recent insider transactions for Paramount Gold and Silver Corp. here.

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

Notable Insider Sales:

1. Express Inc. (EXPR): $24.98

Shares of this apparel chain were sold by 9 insiders:

• President, CEO & Chairman Michael A. Weiss sold 200,000 shares for $25.68, generating $5.1 million from the sale.
• EVP – Planning and Allocation John J. Rafferty sold 105,800 shares for $25.54, generating $2.7 million from the sale.
• EVP – Chief Marketing Officer Lisa A. Gavales sold 60,000 shares for $25.64, generating $1.5 million from the sale.
• EVP-Men’s Merchandising & Design David G. Kornberg sold 60,000 shares for $25.39, generating $1.5 million from the sale.
• EVP – Sourcing and Production Colin Campbell sold 22,500 shares for $25.58, generating $575,620 from the sale.
• EVP – Stores Pierre Jeanne sold 20,000 shares for $25.39, generating $507,868 from the sale.
• EVP & Chief Operating Officer Matthew C. Moellering sold 19,500 shares for $25.39, generating $495,171 from the sale.
• EVP – Real Estate Douglas H. Tilson sold 16,500 shares for $25.39, generating $418,991 from the sale.
• EVP-Women’s Merchandising & Design Fran Horowitz-Bonadies sold 6,500 shares for $25.58, generating $166,302 from the sale.

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

2. Accenture Plc (ACN): $64.5

Shares of this professional services company were sold by 6 insiders:

• Executive Chairman William D. Green sold 130,000 shares for $65.23, generating $8.5 million from the sale.
• Group Chief Executive -Communications, Media & Technology Martin I. Cole sold 34,000 shares for $65.24, generating $2.2 million from the sale.
• Chief Human Resources Officer Jill Smart sold 14,293 shares for $65.14, generating $930,975 from the sale.
• Director Blythe J. McGarvie sold 10,000 shares for $64.56, generating $645,640 from the sale. 5,000 of these shares were sold as a result of exercising options immediately prior to the sale.
• Chief Operating Officer Johan Deblaere sold 6,000 shares for $65.24, generating $391,434 from the sale.
• Chief Financial Officer Pamela J. Craig sold 2,000 shares for $65.23, generating $130,462 from the sale. These shares were sold indirectly through a trust.

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

3. Western Refining, Inc. (WNR): $18.82

Shares of this crude oil refining company were sold by 6 insiders:

• Chairman of BOD, Exec. Chair Paul L. Foster sold 300,000 shares for $19.48, generating $5.8 million from the sale. 100,000 of these shares were sold indirectly by Franklin Mountain Investments Limited Partnership.
• President-Refining & Marketing Mark J. Smith sold 41,294 shares for $19.21, generating $793,130 from the sale.
• Chief Accounting Officer William R. Jewell sold 27,643 shares for $19.21, generating $530,903 from the sale.
• Sr. VP – Treasurer Jeffrey S. Beyersdorfer sold 6,585 shares for $18.47, generating $121,611 from the sale.
• President & CEO Jeff A. Stevens sold 1,317 shares for $18.47, generating $24,322 from the sale.
• Chief Financial Officer Gary R. Dalke sold 969 shares for $18.47, generating $17,895 from the sale.

Except for Mr. Foster’s sales, all other sales were related to the payment of income taxes required to be paid to the Internal Revenue Service as a result of the vesting of restricted stock.

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

4. Macerich Co. (MAC): $57.75

Chairman & CEO Arthur M. Coppola sold 119,360 shares of this retail REIT for $56.73, generating $6.8 million from the sale.

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

5. Toll Brothers Inc. (TOL): $23.99

Director Bruce E. Toll sold 250,000 shares of this luxury home builder for $23.60, generating $5.9 million from the sale.

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

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