Welcome to edition 122 of Insider Weekends. Insider buying declined for the fourth week in a row with insiders purchasing just $12.04 million of their stock last week compared to $22.92 million in the week prior. Selling also declined with insiders selling $983.98 million worth of stock last week compared to $1.03 billion in the week prior. Insider buying generally declines at the start of each quarter and starts picking back up as we get into earnings season. A large part of insider sales had to do with insiders of Dollar General (DG) selling stock in a secondary offering.
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 81.72. In other words, insiders sold almost 82 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 44.8. The Sell/Buy ratio would have dropped to 49.23 excluding a large $391.18 million sale by a director of Dollar General, which was an indirect sale by Goldman Sachs in a secondary offering. 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. Contango Oil & Gas Company (MCF): $50.8
Shares of this independent oil & gas company were acquired by 3 insiders:
Contango has a clever name and just 7 employees as it follows a strategy of outsourcing every aspect of oil and gas exploration and production beyond funding of drilling activities. This allows the company to post unusually high operating margins of nearly 54% (if the numbers on Yahoo! Finance are right). The company has a debt free balance sheet (unusual for an exploration company), $130 million in net cash and trades for 1.67 times book value. Unfortunately revenue and earnings appear to have stalled along with the stock over the last few quarters. This article delves deeper into the company and the comments following the article are especially informative.
You can view the list of recent insider transactions for Contango Oil & Gas Company here.
P/E: 13.42 | Forward P/E: N/A | Industry P/E: 16.76 |
P/S: 4.43 | Price/Book: 1.67 | EV/EBITDA: 4.48 |
Market Cap: $776.83M | Avg. Daily Volume: 86,495 | 52 Week Range: $48.83 – $69.75 |
2. Opko Health, Inc. (OPK): $4.5
CEO & Chairman Phillip Frost M.D. acquired 502,500 shares of this medical devices and drug development company, paying $4.23 per share for a total amount of $2.13 million.
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: 22.82 |
P/S: 41.9 | Price/Book: 8.65 | EV/EBITDA: -55.2 |
Market Cap: $1.34B | Avg. Daily Volume: 975,631 | 52 Week Range: $4 – $5.85 |
3. Tesla Motors, Inc. (TSLA): $28.89
CEO Elon Musk acquired 35,398 shares of this electric car company, paying $28.25 per share for a total amount of $999,994. These shares were acquired through a secondary offering by the company.
You can view the list of recent insider transactions for Tesla Motors, Inc. here.
P/E: N/A | Forward P/E: 76.03 | Industry P/E: 12 |
P/S: 20.15 | Price/Book: 49.75 | EV/EBITDA: -10.14 |
Market Cap: $3.05B | Avg. Daily Volume: 1,414,620 | 52 Week Range: $22.64 – $39.95 |
4. Limited Brands, Inc. (LTD): $50.56
Director Michael G. Morris acquired 10,110 shares of this retailer that owns several brands such as Victoria’s Secret, Pink and Bath & Body Works, paying $49.43 per share for a total amount of $499,737.
Mr. Morris was appointed Limited’s board on September 20. Since new directors often tend to buy stock, I would not read much into this purchase.
You can view the list of recent insider transactions for Limited Brands, Inc. here.
P/E: 21.22 | Forward P/E: 15.56 | Industry P/E: 20.32 |
P/S: 1.41 | Price/Book: N/A | EV/EBITDA: 9.14 |
Market Cap: $14.53B | Avg. Daily Volume: 2,545,400 | 52 Week Range: $37.57 – $52.2 |
5. Extreme Networks Inc. (EXTR): $3.49
Director Edward Terino acquired 100,000 shares of this networking products company, paying $3.38 per share for a total amount of $338,110.
Mr. Terino was appointed to Extreme Network’s board of directors last week.
You can view the list of recent insider transactions for Extreme Networks Inc. here.
P/E: 20.53 | Forward P/E: 12.03 | Industry P/E: 21.59 |
P/S: 1.07 | Price/Book: 1.92 | EV/EBITDA: 11.17 |
Market Cap: $329.90M | Avg. Daily Volume: 521,114 | 52 Week Range: $2.67 – $4.43 |
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Discover Financial Services (DFS): $40.39
Shares of this credit card company were sold by 4 insiders:
With the exception of Mr. Hochschild, all other insiders sold shares immediately after exercising options.
You can view the list of recent insider transactions for Discover Financial Services here.
P/E: 9.32 | Forward P/E: 9.39 | Industry P/E: 13.39 |
P/S: 3.09 | Price/Book: 2.24 | EV/EBITDA: N/A |
Market Cap: $20.48B | Avg. Daily Volume: 3,938,430 | 52 Week Range: $21.98 – $40.81 |
2. Accenture plc (ACN): $70.74
Shares of this management and technology consulting company were sold by 4 insiders:
You can view the list of recent insider transactions for Accenture plc here.
P/E: 18.41 | Forward P/E: 15.25 | Industry P/E: 15.73 |
P/S: 1.63 | Price/Book: 10.95 | EV/EBITDA: 8.59 |
Market Cap: $45.00B | Avg. Daily Volume: 2,896,330 | 52 Week Range: $51.08 – $71.79 |
3. Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA): $99.77
Shares of this Personal Services company were sold by 2 insiders:
You can view the list of recent insider transactions for Ulta Salon, Cosmetics & Fragrance, Inc. here.
P/E: 44.58 | Forward P/E: 30.23 | Industry P/E: 18.1 |
P/S: 3.21 | Price/Book: 9.78 | EV/EBITDA: 19.44 |
Market Cap: $6.31B | Avg. Daily Volume: 727,265 | 52 Week Range: $62.94 – $103.52 |
4. PVH Corp. (PVH): $95.5
Shares of this apparel company were sold by 2 insiders:
You can view the list of recent insider transactions for PVH Corp. here.
P/E: 18.72 | Forward P/E: 13.23 | Industry P/E: 15.07 |
P/S: 1.14 | Price/Book: 2.52 | EV/EBITDA: 10.44 |
Market Cap: $6.74B | Avg. Daily Volume: 850,872 | 52 Week Range: $62.56 – $96.94 |
5. Ellie Mae, Inc. (ELLI): $26.49
Shares of this mortgage software company were sold by 5 insiders:
With the exception of Mr. Buccellato and Mr. Hu, all other insiders sold shares immediately after exercising options. Mr. Anderman and Mr. Hu are co-founders of the company.
You can view the list of recent insider transactions for Ellie Mae, Inc. here.
P/E: 53.73 | Forward P/E: 33.53 | Industry P/E: 23.21 |
P/S: 8.9 | Price/Book: 6.56 | EV/EBITDA: 39.4 |
Market Cap: $667.28M | Avg. Daily Volume: 607,640 | 52 Week Range: $4.76 – $30.4 |
You can view the full list of sales from this Insider Sales page.