Insider Weekends – September 28, 2012

Welcome to edition 121 of Insider Weekends. Insider buying declined for the third week in a row with insiders purchasing $22.92 million of their stock last week compared to $31.78 million in the week prior. Selling also decreased with insiders selling $1.03 billion worth of stock last week compared to $1.3 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 44.8. In other words, insiders sold almost 45 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 40.91. 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. AGCO Corporation (AGCO): $47.48

Director Mallika Srinivasan acquired 113,988 shares of this agricultural equipment manufacturer, paying $45.57 per share for a total amount of $5.19 million. These shares were purchased indirectly by Tractors and Farm Equipment Limited (“TAFE”).

Ms. Srinivasan is the Chairman and CEO of India based TAFE.

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

2. Opko Health, Inc. (OPK): $4.18

CEO & Chairman Phillip Frost M.D. acquired 372,500 shares of this medical devices and drug development company, paying $4.17 per share for a total amount of $1.56 million. These shares were purchased indirectly by Frost Gamma Investments Trust.

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

3. Esterline Technologies Corp. (ESL): $56.14

Shares of this aerospace and defense products company were acquired by 4 insiders:

• General Counsel & VP Administration Marcia J. Mason acquired 2,500 shares, paying $56.17 per share for a total amount of $140,425.
• Director Paul V. Haack acquired 2,000 shares, paying $57.60 per share for a total amount of $115,209. Mr. Haack increased his stake by 12.14% to 18,471 shares with this purchase.
• Director James J. Morris acquired 1,000 shares, paying $57.99 per share for a total amount of $57,987. Mr. Morris increased his stake by 10.06% to 10,938 shares with this purchase.
• Director Mary L. Howell acquired 1,000 shares, paying $57.09 per share for a total amount of $57,090. Ms. Howell increased her stake by 39.37% to 3,540 shares with this purchase.

Voluntary Disclosure: I hold a long posiiton in Esterline Technologies

You can view the list of recent insider transactions for Esterline Technologies Corp. here.

4. Rovi Corporation (ROVI): $14.51

President & CEO Tom Carson acquired 15,000 shares of this entertainment software and services provider, paying $15.00 per share for a total amount of $225,000. Mr. Carson increased his stake by 10.94% to 152,160 shares with this purchase.

This is a very interesting purchase and the only one at Rovi we have seen in over two years. We have mentioned the company in the past following large sales by the previous CEO and following Rovi’s purchase of Sonic Solutions in December 2010. The stock has dropped precipitously since that deal was announced and is down 67% over the last year. Declining revenue, net GAAP losses and a leveraged balance sheet are partially to blame for this drop. On the positive side, non-GAAP earnings and free cash flow have been positive.

Voluntary Disclosure: I hold a long position in Rovi.

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

5. Synergy Resources Corporation (SYRG): $4.17

Director George L. Seward acquired 31,454 shares of this oil and natural gas exploration company, paying $3.33 per share for a total amount of $104,742. Mr. Seward increased his stake by 2.59% to 1,247,661 shares with this purchase.

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

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

Notable Insider Sales:

1. FactSet Research Systems Inc. (FDS): $96.42

Director Charles J. Snyder sold 119,562 shares of this financial and economic data provider for $97.13, generating $11.6 million from the sale. 15,000 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 FactSet Research Systems Inc. here.

2. Fidelity National Financial, Inc. (FNF): $21.39

Director William P. Foley II sold 500,000 shares of this insurance company for $21.21, generating $10.6 million from the sale.

You can view the list of recent insider transactions for Fidelity National Financial, Inc. here.

3. Drew Industries Inc. (DW): $30.21

Shares of this recreational vehicles and home products company were sold by 3 insiders:

• Director Edward W. Rose III sold 130,657 shares for $30.27, generating $3.95 million from the sale.
• Director James Gero sold 28,271 shares for $30.95, generating $875,028 from the sale. 7,500 of these shares were sold as a result of exercising options immediately prior to the sale.
• Director John B. Lowe Jr. sold 14,500 shares for $30.89, generating $447,905 from the sale. 7,500 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 Drew Industries Inc. here.

4. BankUnited, Inc. (BKU): $24.61

Shares of this regional bank were sold by 2 insiders:

• Chief Operating Officer Rajinder P. Singh sold 116,816 shares for $25.07, generating $2.9 million from the sale.
• Chief Lending Officer John Bohlsen sold 88,636 shares for $25.19, generating $2.2 million from the sale.

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

5. Alliance Data Systems Corporation (ADS): $141.95

Shares of this marketing and customer loyalty solutions provider were sold by 3 insiders:

• Director Robert A. Minicucci sold 30,000 shares for $142.61, generating $4.3 million from the sale.
• Director Lawrence M. Benveniste sold 5,059 shares for $142.53, generating $721,040 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Director Roger H. Ballou sold 1,060 shares for $143.65, generating $152,269 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 Alliance Data Systems Corporation here.

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