Insider Weekends – June 1, 2012

  • June 2, 2012

Welcome to edition 104 of Insider Weekends. Insider buying increased with insiders purchasing $346.3 million of their stock last week compared to $68.2 million in the week prior. Selling decreased significantly with insiders selling $373.3 million worth of stock last week compared to $2.2 billion in the week prior. A majority of the buying was led by a $295.43 million purchase of Hewlett-Packard (HPQ) by one of its directors Ralph Whitworth of behalf of the activist fund Relational Investors he founded and other accounts managed by him. You can read a very brief “spotlight” on Mr. Whitworth by The Independent here.

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 sharply to 1.1. In other words, insiders sold almost the same amount of stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 32.7. This is the lowest ratio we have seen since late last August when it hit a low of just 1.01. Removing the Hewlett-Packard purchase by Mr. Whitworth would bump the ratio up to 7.34. 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 June 1, 2012
Insider Sell Buy Ratio June 1, 2012

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. CVR Energy, Inc. (CVI): $24.7

Director Carl C. Icahn acquired 1 million shares of this petroleum refiner, paying $26.62 per share for a total amount of $26.6 million. These shares were purchased indirectly by Mr. Icahn through subsidiaries.

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

P/E: 7.86Forward P/E: 5.81Industry P/E: 11.73
P/S: 0.38Price/Book: 1.95EV/EBITDA: 3.78
Market Cap: $2.14BAvg. Daily Volume: 2,169,11052 Week Range: $16.62 – $31.71

2. Furiex Pharmaceuticals, Inc. (FURX): $19.67

Director Fredric N. Eshelman acquired 170,206 shares of this drug development collaboration company, paying $19.90 per share for a total amount of $3.4 million. Mr. Eshelman increased his stake by 7.41% to 2,467,641 shares with this purchase.

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

P/E: N/AForward P/E: N/AIndustry P/E: 23.23
P/S: 29.43Price/Book: 3.01EV/EBITDA: -3.99
Market Cap: $195.70MAvg. Daily Volume: 103,09752 Week Range: $12.16 – $25

3. American Public Education, Inc. (APEI): $28.55

Director Timothy T. Weglicki acquired 103,500 shares of this for-profit education company, paying $29.37 per share for a total amount of $3.04 million. 100,000 of these shares were purchased indirectly by private equity firm ABS Capital Partners, of which Mr. Weglicki is a founding partner.

You can view the list of recent insider transactions for American Public Education, Inc. here.

P/E: 12.41Forward P/E: 11.24Industry P/E: 23.23
P/S: 1.84Price/Book: 3.58EV/EBITDA: 5.19
Market Cap: $512.19MAvg. Daily Volume: 230,33952 Week Range: $26.85 – $49.29

4. Vocus Inc. (VOCS): $15.72

Shares of this marketing software company were acquired by 2 insiders:

  • Chairman, CEO and President Richard E. Rudman acquired 65,000 shares, paying $14.97 per share for a total amount of $973,050. Mr. Rudman increased his stake by 11.20% to 645,185 shares with this purchase.
  • Director Kevin J. Burns acquired 10,000 shares, paying $15.27 per share for a total amount of $152,700. Mr. Burns increased his stake by 28.09% to 45,602 shares with this purchase.

Mr. Rudman also spent nearly $1 million in early May, buying 60,000 shares of Vocus. Three other insiders including the CFO also picked up shares in May following the release of Q1 earnings as you can see from this page.

The stock declined sharply in late February when it fell from $22.55 to $13.53 in a single day after the company decided to shell out $179 million for email marketing firm iContact. For the full year 2012, the company expects to generate revenue of around $170 million and non-GAAP earnings per share of 38 to 40 cents. Even if the company achieves the high end of its non-GAAP earnings forecast, the stock looks expensive at these levels.

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

P/E: N/AForward P/E: 24.56Industry P/E: 14.67
P/S: 2.71Price/Book: 3.07EV/EBITDA: N/A
Market Cap: $324.24MAvg. Daily Volume: 421,19252 Week Range: $11.95 – $33.7

5. Opko Health, Inc. (OPK): $4.49

CEO & Chairman Phillip Frost M.D. acquired 160,000 shares of this drug development and medical devices company, paying $4.64 per share for a total amount of $742,417. 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/AForward P/E: N/AIndustry P/E: 17.77
P/S: 45.55Price/Book: 8.76EV/EBITDA: -59.5
Market Cap: $1.33BAvg. Daily Volume: 1,508,12052 Week Range: $3.15 – $5.85

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

Notable Insider Sales:

1. Toll Brothers Inc. (TOL): $25.24

Director Bruce E. Toll sold 400,000 shares of this luxury home builder for $27.98, generating $11.2 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 60.38Forward P/E: 28.04Industry P/E: 34.62
P/S: 3Price/Book: 1.74EV/EBITDA: 47.83
Market Cap: $4.21BAvg. Daily Volume: 4,085,27052 Week Range: $13.16 – $28.75

2. Illinois Tool Works Inc. (ITW): $54.85

Shares of this diversified machinery company were sold by 2 insiders:

  • Director Robert C. McCormack sold 128,500 shares for $55.39, generating $7.1 million from the sale. These shares were sold indirectly through trusts.
  • Vice Chairman Ernest Scott Santi sold 60,000 shares for $57.00, generating $3.4 million 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 Illinois Tool Works Inc. here.

P/E: 13.91Forward P/E: 11.62Industry P/E: 15.52
P/S: 1.48Price/Book: 2.65EV/EBITDA: 8.77
Market Cap: $26.18BAvg. Daily Volume: 2,874,48052 Week Range: $39.12 – $59.27

3. CenturyLink, Inc. (CTL): $37.05

Chief Exec Officer-Savvis Ops James E. Ousley sold 150,000 shares of this integrated communications company for $39.33, generating $5.9 million from the sale.

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

P/E: 40.58Forward P/E: 15.18Industry P/E: 29.5
P/S: 1.31Price/Book: 1.16EV/EBITDA: 5.87
Market Cap: $23.02BAvg. Daily Volume: 4,592,77052 Week Range: $31.16 – $41.32

4. Comcast Corporation (CMCSA): $28.63

Vice Chairman and CFO Michael J. Angelakis sold 179,690 shares of this entertainment and telecommunications provider for $29.00, generating $5.2 million from the sale. 82,890 of these shares were sold directly and the rest were sold indirectly through trusts and other entities.

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

P/E: 17.78Forward P/E: 12.95Industry P/E: 14.26
P/S: 1.33Price/Book: 1.64EV/EBITDA: 5.87
Market Cap: $77.19BAvg. Daily Volume: 12,540,00052 Week Range: $19.19 – $30.88

5. Liquidity Services, Inc. (LQDT): $59.87

Shares of this online auction company were sold by 2 insiders:

  • Director Jaime Mateus-Tique sold 33,000 shares for $63.45, generating $2.1 million from the sale. These shares were sold indirectly through a trust.
  • Chairman of the Board and CEO William P. Angrick III sold 12,576 shares for $63.04, generating $792,791 from the sale. These shares were sold indirectly through a trust.

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

P/E: 63.29Forward P/E: 28.78Industry P/E: 10.14
P/S: 5.06Price/Book: 8.34EV/EBITDA: N/A
Market Cap: $1.87BAvg. Daily Volume: 488,17052 Week Range: $19.89 – $66.57

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