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Insider Weekends – July 11, 2014

  • July 12, 2014

Welcome to edition 212 of Insider Weekends. Insider buying increased last week with insiders buying $36.57 million of stock compared to $29.59 million in the week prior. Selling declined precipitously with insiders selling $292.66 million of stock last week compared to $819.56 million in the week prior. With the start of earnings season, insider transactions are likely to be muted for a couple of weeks.

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 8.66. In other words, insiders sold almost 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 27.7. 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 July 11, 2014
Insider Sell Buy Ratio July 11, 2014

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. Select Income REIT (SIR): $29.14

Shares of this retail REIT were acquired by 2 insiders:

  • Director Barry M. Portnoy acquired 275,000 shares, paying $31.51 per share for a total amount of $8.67 million.
  • Director Adam Portnoy acquired 225,000 shares, paying $31.51 per share for a total amount of $7.09 million.

According to the filing these shares were acquired indirectly by Reit Management & Research LLC (RMR), which is a company that manages SIR. On July 9th, CommonWealth REIT (CWH) sold its entire stake in SIR to Government Properties (GOV), which is another office REIT managed by RMR and the Portnoys. These filings appear to be related to this transaction and were not open market purchases.

You can view the list of recent insider transactions for Select Income REIT Common Share here.

P/E: N/AForward P/E: N/AIndustry P/E: N/A
P/S: N/APrice/Book: N/AEV/EBITDA: N/A
Market Cap: $N/AAvg. Daily Volume: N/A52 Week Range: $23.79 – $31.47

2. Opko Health, Inc. (OPK): $8.99

CEO & Chairman Phillip Frost M.D. acquired 122,800 shares of this medical devices and drug development company, paying $8.78 per share for a total amount of $1.08 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.

P/E: N/AForward P/E: N/AIndustry P/E: 26.61
P/S: 41.5Price/Book: 4.34EV/EBITDA: -47.78
Market Cap: $3.72BAvg. Daily Volume: 2,530,39052 Week Range: $7.3 – $12.95

3. TCP International Holdings Ltd. (TCPI): $10

Director George E. Strickler acquired 88,000 shares of this global provider of energy efficient lighting, paying $11.00 per share for a total amount of $968,000.

You can view the list of recent insider transactions for TCP International Holdings Ltd. here.

P/E: N/AForward P/E: N/AIndustry P/E: N/A
P/S: 0.65Price/Book: 28.43EV/EBITDA: 10.6
Market Cap: $276.96MAvg. Daily Volume: 532,69152 Week Range: $9.85 – $11.4

4. Ladenburg Thalmann Financial Services Inc. (LTS): $3.72

Shares of this investment brokerage were acquired by 2 insiders:

  • Director Saul Gilinski acquired 170,085 shares, paying $3.55 per share for a total amount of $603,926. Mr. Gilinski increased his stake by 14.29% to 1,360,074 shares with this purchase.
  • Director Phillip Frost M.D. acquired 100,000 shares, paying $3.50 per share for a total amount of $349,530. These shares were purchased indirectly by Frost Gamma Investments Trust

You can view the list of recent insider transactions for Ladenburg Thalmann Financial Services Inc. here.

P/E: N/AForward P/E: 93Industry P/E: 22.63
P/S: 0.93Price/Book: 3.23EV/EBITDA: N/A
Market Cap: $676.34MAvg. Daily Volume: 363,12752 Week Range: $1.61 – $3.9

5. Dycom Industries Inc. (DY): $29.37

Director Charles B. Coe acquired 15,000 shares of this engineering and specialty contracting services provider, paying $31.05 per share for a total amount of $465,762. Mr. Coe increased his stake by 48.73% to 45,782 shares with this purchase.

It is interesting to see Mr. Coe pick up additional shares following his January purchase of 15,000 shares at an average price of $27.99. We wrote the following about his purchase in January,

“This is the most interesting purchase of the group of insider purchases this week. The company is growing revenue rapidly and trades at a reasonable 7 times EBITDA.”

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

P/E: 26.58Forward P/E: 17.59Industry P/E: 20.57
P/S: 0.56Price/Book: 2.16EV/EBITDA: 7.67
Market Cap: $997.05MAvg. Daily Volume: 242,12652 Week Range: $23.69 – $34

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

Notable Insider Sales:

1. Ashland Inc. (ASH): $107.47

Shares of this specialty chemicals company were sold by 2 insiders:

  • Chief Executive Officer James J. O’Brien sold 160,933 shares for $108.14, generating $17.4 million from the sale. These shares were sold indirectly through a trust.
  • Vice President Anne T. Schumann sold 353 shares for $108.95, generating $38,459 from the sale.

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

P/E: 14.25Forward P/E: 14.82Industry P/E: 15.38
P/S: 1.08Price/Book: 1.83EV/EBITDA: 6.85
Market Cap: $8.38BAvg. Daily Volume: 582,31852 Week Range: $84.17 – $110.02

2. Five Below, Inc. (FIVE): $36.51

Executive Chairman David Schlessinger sold 100,000 shares of this specialty value retailer for $37.24, generating $3.72 million from the sale.

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

P/E: 59.08Forward P/E: 31.21Industry P/E: 25.79
P/S: 3.53Price/Book: 16.2EV/EBITDA: 27.96
Market Cap: $1.98BAvg. Daily Volume: 956,57352 Week Range: $33.94 – $55.28

3. Crestwood Midstream Partners LP (CMLP): $22.32

Director John J. Sherman sold 157,936 shares of this natural gas company for $22.04, generating $3.48 million from the sale. These shares were sold indirectly through trusts.

You can view the list of recent insider transactions for Crestwood Midstream Partners LP here.

P/E: N/AForward P/E: 35.43Industry P/E: 36.4
P/S: 3.72Price/Book: 1.04EV/EBITDA: 24
Market Cap: $4.20BAvg. Daily Volume: 562,49752 Week Range: $20.4 – $25.6

4. Hanesbrands Inc. (HBI): $96.94

CEO Richard A. Noll sold 30,000 shares of this apparel company for $96.98, generating $2.91 million from the sale.

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

P/E: 30.79Forward P/E: 17.04Industry P/E: 21.04
P/S: 2.03Price/Book: 7.7EV/EBITDA: 15.82
Market Cap: $9.65BAvg. Daily Volume: 815,60352 Week Range: $51.9 – $99.99

5. Palo Alto Networks, Inc. (PANW): $76.92

CTO Nir Zuk sold 30,000 shares of this network security company for $75.81, generating $2.27 million from the sale.

You can view the list of recent insider transactions for Palo Alto Networks, Inc. here.

P/E: N/AForward P/E: 116.55Industry P/E: 21.11
P/S: 11.11Price/Book: 21.76EV/EBITDA: -200.46
Market Cap: $5.93BAvg. Daily Volume: 1,834,55052 Week Range: $40.36 – $85.78

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

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria