Welcome to edition ninety six of Insider Weekends. Insider buying increased with insiders purchasing $28.9 million of their stock last week compared to $19.8 million in the week prior. Selling also increased with insiders selling $1.45 billion worth of stock last week compared to $1.4 billion 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 down to 50.3. In other words, insiders sold more than 50 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 71.1. 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, 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. Opko Health, Inc. (OPK): $4.75
CEO & Chairman Phillip Frost M.D. acquired 95,000 shares of this medical devices and drug development company, paying $4.74 per share for a total amount of $450,054. These shares were purchased indirectly by Frost Gamma Investments Trust.
You can view the list of recent insider transactions for Opko Health, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 23.95|
|P/S: 49.57||Price/Book: 8.62||EV/EBITDA: -69.16|
|Market Cap: $1.40B||Avg. Daily Volume: 1,713,450||52 Week Range: $3.15 – $5.85|
2. Vera Bradley, Inc. (VRA): $31.04
Shares of this fashion accessories company were acquired by 2 insiders:
- Chief Executive Officer Michael C. Ray acquired 10,000 shares, paying $30.44 per share for a total amount of $304,420. Mr. Ray increased his stake by 1.03% to 981,343 shares with this purchase.
- Director Stephen J. Hackman acquired 1,000 shares, paying $29.90 per share for a total amount of $29,900. Mr. Hackman increased his stake by 28.47% to 4,513 shares with this purchase.
These purchases follow a couple of small purchases by the controller and a director last week. The stock declined mid-march after the company forecast earnings of 27 to 29 cents for the next quarter, which was below analysts expectations of 30 cents per share. The company operates a small number of stores and mostly sells its products through 3,300 retailers. Their reasonably priced products appear to have struck a chord with consumers as the company has seen impressive revenue and earnings growth over the last three years. Both revenue and earnings for the full fiscal year ended January 2012 were up 25%.
The company has been paying down debt and has a strong balance sheet with current assets far exceeding total liabilities. With revenue growth expected to come in at 18% for the current fiscal year and operating margins of 20%, a forward P/E of 15 and EV/EBITDA of 12 look reasonable for the company. A couple of red flags to watch out for include claims of channel stuffing by certain investors and a product line that looks odd (everything is floral) to my uncultured male eyes based on a quick twirl around their website.
Voluntary Disclosure: I picked up some shares for my portfolio following these purchases on Monday, April 2, 2012.
You can view the list of recent insider transactions for Vera Bradley, Inc. here.
|P/E: 21.71||Forward P/E: 15.37||Industry P/E: 15|
|P/S: 2.74||Price/Book: 10.18||EV/EBITDA: 12.1|
|Market Cap: $1.26B||Avg. Daily Volume: 776,327||52 Week Range: $24.83 – $52.36|
3. Matador Resources Company (MTDR): $11.39
Chairman, CEO and President Joseph WM. Foran acquired 24,000 shares of this independent energy company, paying $11.50 per share for a total amount of $276,000. Mr. Foran increased his stake by 24.00% to 124,000 shares with this purchase.
You can view the list of recent insider transactions for Matador Resources Company here.
|P/E: N/A||Forward P/E: 5.56||Industry P/E: 18.28|
|P/S: 7.32||Price/Book: 1.81||EV/EBITDA: 11.25|
|Market Cap: $487.13M||Avg. Daily Volume: 251,315||52 Week Range: $10.61 – $12.33|
4. Regional Management Corp. (RM): $16.05
Director Alvaro G. de Molina acquired 10,000 shares of this company that provides personal loans, paying $17.50 per share for a total amount of $175,000.
Regional Management went public last week at $15/share and it is a little odd to see an insider purchase shares on the open market shortly thereafter. Mr. de Molina was the former CFO of Bank of America for a period of 14 months and later served as the CEO of GMAC (now know as Ally bank) for 20 months.
You can view the list of recent insider transactions for Regional Management Corp. here.
|P/E: 7.26||Forward P/E: N/A||Industry P/E: N/A|
|P/S: 2.32||Price/Book: 2.9||EV/EBITDA: N/A|
|Market Cap: $149.84M||Avg. Daily Volume: 425,914||52 Week Range: $16.01 – $17.94|
5. Sealy Corporation (ZZ): $2.05
Director Richard Roedel acquired 72,600 shares of this mattress manufacturer, paying $2.04 per share for a total amount of $148,265. Mr. Roedel increased his stake by 644.93% to 83,857 shares with this purchase.
You can view the list of recent insider transactions for Sealy Corporation here.
|P/E: N/A||Forward P/E: 20.5||Industry P/E: 14.14|
|P/S: 0.16||Price/Book: N/A||EV/EBITDA: 7.49|
|Market Cap: $206.99M||Avg. Daily Volume: 514,360||52 Week Range: $1.09 – $2.99|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Toll Brothers Inc. (TOL): $23.15
Shares of this luxury home builder were sold by 2 insiders:
- Executive Chairman Robert Toll I sold 1,059,817 shares for $24.61, generating $26.1 million from the sale. 500,000 of these shares were sold as a result of exercising options immediately prior to the sale and 61,817 of these shares were sold indirectly through a GRAT.
- Director Bruce E. Toll sold 100,000 shares for $24.23, generating $2.4 million from the sale.
You can view the list of recent insider transactions for Toll Brothers Inc. here.
|P/E: 115.17||Forward P/E: 30.46||Industry P/E: 22.81|
|P/S: 2.68||Price/Book: 1.51||EV/EBITDA: 45.63|
|Market Cap: $3.86B||Avg. Daily Volume: 3,357,010||52 Week Range: $13.16 – $25.29|
2. Seagate Technology PLC (STX): $25.72
Shares of this data storage company were sold by 2 insiders:
- Chairman, President and CEO Stephen J. Luczo sold 520,000 shares for $27.30, generating $14.2 million from the sale. 500,000 of these shares were sold indirectly through a trust and 20,000 shares were sold as a result of exercising options immediately prior to the sale.
- EVP,General Counsel, CAO Kenneth M. Massaroni sold 5,000 shares for $27.01, generating $135,050 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.
|P/E: 12.43||Forward P/E: 2.99||Industry P/E: 27.21|
|P/S: 1.07||Price/Book: 3.68||EV/EBITDA: 6.13|
|Market Cap: $11.54B||Avg. Daily Volume: 11,945,800||52 Week Range: $9.05 – $28.63|
3. Limited Brands, Inc. (LTD): $48.25
Shares of this apparel chain were sold by 2 insiders:
- CEO/P VS Megabrand Int App Group Sharen J. Turney sold 188,000 shares for $48.98, generating $9.2 million from the sale.
- President Global Sourcing & Logistics Charles McGuigan sold 31,286 shares for $48.61, generating $1.5 million from the sale. 20,228 of 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 Limited Brands, Inc. here.
|P/E: 17.87||Forward P/E: 15.13||Industry P/E: 17.78|
|P/S: 1.36||Price/Book: 104.94||EV/EBITDA: 9.37|
|Market Cap: $13.96B||Avg. Daily Volume: 2,973,630||52 Week Range: $31.43 – $49.96|
4. Jabil Circuit Inc. (JBL): $24.2
Shares of this electronic manufacturing services provider were sold by 5 insiders:
- President & CEO Timothy L. Main sold 115,600 shares for $25.25, generating $2.9 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director William D. Morean sold 115,300 shares for $25.24, generating $2,910,213 from the sale. 74,600 of these shares were sold indirectly through William D. Morean Trust and 2,300 of these shares were sold indirectly by the Eagle’s Wing Foundation.
- EVP, CEO, Manufacturing Services William D. Muir sold 20,000 shares for $25.03, generating $500,668 from the sale.
- Chief Operating Officer Mark T. Mondello sold 15,000 shares for $25.26, generating $378,869 from the sale.
- Chief Financial Officer Forbes I. Alexander sold 9,665 shares for $25.26, generating $244,125 from the sale.
You can view the list of recent insider transactions for Jabil Circuit Inc. here.
|P/E: 12.17||Forward P/E: 8.04||Industry P/E: 15.91|
|P/S: 0.3||Price/Book: 2.53||EV/EBITDA: 5.82|
|Market Cap: $5.02B||Avg. Daily Volume: 2,900,970||52 Week Range: $13.94 – $27.4|
5. Coffee Holding Co.Inc. (JVA): $9.24
Shares of this branded and private label coffee manufacturer were sold by 2 insiders:
- Vice President David Gordon sold 310,000 shares for $9.82, generating $3.04 million from the sale. 60,000 of these shares were sold indirectly by Mr. Gordon as custodian for his minor children.
- President and CEO Andrew Gordon sold 290,000 shares for $10.14, generating $2.9 million from the sale.
You can view the list of recent insider transactions for Coffee Holding Co.Inc. here.
|P/E: 41.43||Forward P/E: 8.56||Industry P/E: 20.66|
|P/S: 0.36||Price/Book: 2.74||EV/EBITDA: 18.64|
|Market Cap: $58.88M||Avg. Daily Volume: 715,850||52 Week Range: $5.2 – $30.98|
You can view the full list of sales from this Insider Sales page.