Insider Weekends – September 21, 2012

Welcome to edition 120 of Insider Weekends. Insider buying dropped once again with insiders purchasing $31.78 million of their stock last week compared to $74.12 million in the week prior. Selling also decreased with insiders selling $1.3 billion worth of stock last week compared to $1.53 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 went up to 40.91. In other words, insiders sold almost 41 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 20.69. 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. Bruker Corporation (BRKR): $12.99

Shares of this scientific instruments provider were acquired by 2 insiders:

• Director Joerg C. Laukien acquired 100,000 shares, paying $13.00 per share for a total amount of $1.3 million. Mr. Laukien increased his stake by 0.55% to 18,187,755 shares with this purchase.
• CEO/President Frank H. Laukien acquired 100,000 shares, paying $13.00 per share for a total amount of $1.3 million. Mr. Laukien increased his stake by 0.26% to 39,059,445 shares with this purchase.

Based on the exact same purchase price for both transactions and the amount of stock acquired, this feels like a private placement or an acquisition through a secondary offering instead of an open market purchase. However there was nothing in the footnotes or any other SEC filings to indicate this was anything but a regular purchase. Trading for over 10 times EBITDA and sporting low single digit margins, the stock does not look very attractive at first glance.

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

2. Cracker Barrel Old Country Store, Inc. (CBRL): $66.67

10% Owner Sardar Biglari acquired 26,528 shares of this restaurant chain, paying $63.64 per share for a total amount of $1.69 million.

You can view the list of recent insider transactions for Cracker Barrel Old Country Store, Inc. here.

3. Chesapeake Energy Corporation (CHK): $19.36

Director Archie W. Dunham acquired 75,000 shares of this oil and natural gas producer, paying $20.00 per share for a total amount of $1.5 million. Mr. Dunham increased his stake by 29.83% to 326,391 shares with this purchase.

As we reported in June of this year, several directors have purchased shares of Chesapeake since the widely reported “governance crisis” and the subsequent sharp decline in the stock. This is the largest purchase this year. You can view all insider transactions for Chesapeake here.

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

4. Opko Health, Inc. (OPK): $4.28

CEO & Chairman Phillip Frost M.D.  acquired 275,000 shares of this medical devices and drug development company, paying $4.37 per share for a total amount of $1.2 million. These shares were purchsaed indirectly by Frost Gamma Investments Trust.

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

5. Merrimack Pharmaceuticals, Inc. (MACK): $10.43

Director Gary L. Crocker acquired 64,800 shares of this biotech company, paying $8.33 per share for a total amount of $539,609. 39,000 of these shares were purchased indirectly by Crocker Ventures, LLC and 25,800 shares were purchased indirectly by Mr. Crocker’s wife.

Crocker Ventures is a self-funded private investment firm that invests in seed and early stage companies in the health science and healthcare segments. It is a little unusual that in addition to picking up shares for the firm, Mr. Crocker also picked up shares for his wife. The company recently amended it lease agreement with its landlord to lease an additional 23,250 square feet of space for a total of 109,132 square feet of research, manufacturing and office space.

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

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

Notable Insider Sales:

1. ExactTarget, Inc. (ET): $23.26

Shares of this marketing services provider were sold by 9 insiders:

• 10% Owner Jay Hoag sold 3,795,330 shares for $21.46, generating $81.4 million from the sale.
• Director Rory O’Driscoll sold 1,049,427 shares for $22.50, generating $23.6 million from the sale.
• Chief Executive Officer Scott D. Dorsey sold 300,000 shares for $21.46, generating $6.4 million from the sale.
• Chief Operating Officer Scott S. McCorkle sold 120,000 shares for $21.46, generating $2.6 million from the sale.  These shares were sold as a result of exercising options immediately prior to the sale.
• Executive VP–Global Sales Andrew J. Kofoid sold 85,500 shares for $21.46, generating $1.8 million from the sale.  These shares were sold as a result of exercising options immediately prior to the sale.
• Chief Marketing Officer Timothy B. Kopp sold 85,125 shares for $21.46, generating $1.8 million from the sale.  These shares were sold as a result of exercising options immediately prior to the sale.
• Chief Admin. Off. & Secretary Traci M. Dolan sold 82,500 shares for $21.46, generating $1.8 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Director David Yuan sold 23,014 shares for $21.46, generating $493,867 from the sale.
• Director Timothy I. Maudlin sold 11,349 shares for $21.46, generating $243,543 from the sale.
• Director Matthew W. Ferguson sold 8,949 shares for $21.46, generating $192,040 from the sale.

These shares appear to have been sold through a secondary offering by certain shareholders.

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

2. On Assignment Inc. (ASGN): $20.59

Shares of this professional staffing firm were sold by 5 insiders:

• Director Brian J. Callaghan sold 1,975,552 shares for $16.18, generating $31.9 million from the sale.
• Director Edwin A. Sheridan sold 1,639,832 shares for $16.18, generating $26.5 million from the sale.
• CFO of Apex Systems, Inc. Theodore S. Hanson sold 204,925 shares for $16.18, generating $3.3 million from the sale.
• President & CEO Peter T. Dameris sold 149,998 shares for $16.18, generating $2.4 million from the sale.  These shares were sold as a result of exercising options immediately prior to the sale.
• President of Apex Systems, Inc Randolph C. Blazer sold 78,275 shares for $16.18, generating $1.3 million from the sale.

Once again these shares were sold through a secondary offering by certain shareholders.

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

3. Allied Nevada Gold Corp. (ANV): $39.52

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

• Director Carl A. Pescio sold 896,200 shares for $38.23, generating $34.3 million from the sale.
• VP, Explorations Dave Charles Flint sold 12,292 shares for $37.37, generating $459,400 from the sale.  These shares were sold as a result of exercising options immediately prior to the sale.
• VP, Metallurgy David L. Hill sold 5,900 shares for $37.27, generating $219,878 from the sale.

You can view the list of recent insider transactions for Allied Nevada Gold Corp. here.

4. Garmin Ltd. (GRMN): $41.94

Chief Executive Officer Min H. Kao sold 463,476 shares of this GPS manufacturer for $42.17, generating $19,5 million from the sale. These shares were sold indirectly by Mr. Kao’s children.

You can view the list of recent insider transactions for Garmin Ltd. here.

5. Intuit Inc. (INTU): $58.38

Shares of this accounting and tax software company were sold by 2 insiders:

• Director Christopher W. Brody sold 190,000 shares for $59.80, generating $11.4 million from the sale. 142,331 of these shares were sold indirectly by Vantage Partners, Inc. and 57,140 of these shares were sold as a result of exercising options immediately prior to the sale.
• SVP and CFO Neil R. Williams sold 28,000 shares for $58.50, generating $1.6 million from the sale.

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

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