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Insider Weekends – December 12, 2014

  • December 14, 2014

Welcome to edition 234 of Insider Weekends. In a week where we saw the Dow post its biggest weekly decline since 2011, insider buying more than quadrupled with insiders buying $190.94 million of stock compared to $44.02 million in the week prior. Part of this buying was driven by insiders from the energy sector as we saw in our previous report and the other part was driven by certain value-oriented and biotech funds adding to their positions. Selling declined with insiders selling $1.34 billion of stock last week compared to $1.47 billion in the week prior.

Some of the fund related purchases include the biotech-focused Baker Brothers adding to their position in Seattle Genetics (SGEN) to the tune of $42.29 million, Jeffrey Ubben of San Francisco based value-oriented fund ValueAct Capital pitching in an additional $35 million to add to his position in Valeant Pharmaceuticals (VRX) and Carl Icahn’s ex-prodigy Mark Rachesky adding to his position in large tire manufacturer Titan International (TWI).

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 to 7.02. In other words, insiders sold 7 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 33.47. 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 December 12, 2014
Insider Sell Buy Ratio December 12, 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. RPC Inc. (RES): $11.86

Chairman of the Board R. Randall Rollins acquired 1,228,400 shares of this oilfield services and equipment provider, paying $12.18 per share for a total amount of $14.96 million. These shares were purchased indirectly by RFPS Investments II, LP.

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

P/E: 12.62Forward P/E: 9.49Industry P/E: 13.41
P/S: 1.19Price/Book: 2.46EV/EBITDA: 4.76
Market Cap: $2.59BAvg. Daily Volume: 1,515,79052 Week Range: $11.55 – $25.15

2. Freeport-McMoRan Inc. (FCX): $21.78

Vice Chairman of the Board James C. Flores acquired 500,000 shares of this mining company, paying $23.60 per share for a total amount of $11.8 million. These shares were purchased indirectly by Flores Family Limited Partnership.

You can view the list of recent insider transactions for Freeport-McMoRan Inc. here.

P/E: 10.13Forward P/E: 9.95Industry P/E: 15.44
P/S: 1.08Price/Book: 1.11EV/EBITDA: 4.96
Market Cap: $22.63BAvg. Daily Volume: 13,292,50052 Week Range: $21.77 – $39.32

3. EV Energy Partners LP (EVEP): $23.83

Executive Chairman of the Board John B. Walker acquired 150,000 shares of this oil & natural gas exploration and production company, paying $24.46 per share for a total amount of $3.67 million. Mr. Walker increased his stake by 8.27% to 1,963,698 shares with this purchase. 75,000 of these shares were purchased indirectly by John B. and Lisa A. Walker, L.P.

You can view the list of recent insider transactions for EV Energy Partners LP here.

P/E: N/AForward P/E: 12.88Industry P/E: 9.46
P/S: 3.32Price/Book: 1.14EV/EBITDA: 14.14
Market Cap: $1.16BAvg. Daily Volume: 363,86252 Week Range: $22.18 – $41.97

4. Endurance Specialty Holdings Ltd. (ENH): $58.02

Chairman & Chief Executive Officer John “King of the London Insurance Market” Charman acquired 57,968 shares of this insurance company, paying $58.36 per share for a total amount of $3.38 million. 35,312 of these shares were purchased indirectly through various trusts.

We have seen insider purchases by Mr. Charman in the past but this is his largest purchase of Endurance since he took over the position of CEO in May 2013.

You can view the list of recent insider transactions for Endurance Specialty Holdings Ltd. here.

P/E: 8.67Forward P/E: 9.9Industry P/E: 12.15
P/S: 1.27Price/Book: 0.84EV/EBITDA: 5.76
Market Cap: $2.60BAvg. Daily Volume: 165,20052 Week Range: $49.58 – $60

5. Prospect Capital Corporation (PSEC): $8.11

Shares of this business development company were acquired by 3 insiders:

  • Chief Executive Officer John F. Barry acquired 132,200 shares, paying $8.46 per share for a total amount of $1.12 million. Mr. Barry increased his stake by 2.81% to 4,833,410 shares with this purchase.
  • CFO, CCO, Treasury & Secretary Brian H. Oswald acquired 63,500 shares, paying $8.35 per share for a total amount of $529,965. Mr. Oswald increased his stake by 20.39% to 375,000 shares with this purchase.
  • Chief Operating Officer Grier M. Eliasek acquired 25,000 shares, paying $8.31 per share for a total amount of $207,740. Mr. Eliasek increased his stake by 10.11% to 272,196 shares with this purchase.

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

P/E: N/AForward P/E: N/AIndustry P/E: 13.31
P/S: N/APrice/Book: N/AEV/EBITDA: N/A
Market Cap: $N/AAvg. Daily Volume: N/A52 Week Range: $8.02 – $11.4

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

Notable Insider Sales:

1. Twitter, Inc. (TWTR): $37.1

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 372,000 shares for $36.87, generating $13.72 million from the sale. 349,680 of these shares were sold indirectly through various trusts.
  • Vice President of Product Kevin Weil sold 5,426 shares for $39.96, generating $216,842 from the sale.

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

P/E: N/AForward P/E: 109.12Industry P/E: 36.26
P/S: 19.67Price/Book: 6.51EV/EBITDA: -26.75
Market Cap: $23.19BAvg. Daily Volume: 25,406,00052 Week Range: $29.51 – $74.73

2. Masco Corporation (MAS): $24.05

Director Richard A. Manoogian sold 500,000 shares of this building materials company for $24.83, generating $12.42 million from the sale.

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

P/E: 10.97Forward P/E: 18.94Industry P/E: 24.69
P/S: 1.03Price/Book: 7.48EV/EBITDA: 10.95
Market Cap: $8.57BAvg. Daily Volume: 4,583,18052 Week Range: $19.5 – $25.07

3. IPG Photonics Corporation (IPGP): $75.13

Shares of this optical fiber-based lasers company were sold by 2 insiders:

  • CEO & Chairman of the Board Valentin P. Gapontsev sold 130,000 shares for $77.06, generating $10.02 million from the sale.
  • SVP, Chief Financial Officer Timothy P. V. Mammen sold 700 shares for $77.60, generating $54,320 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 IPG Photonics Corporation here.

P/E: 21.96Forward P/E: 17.89Industry P/E: 21.42
P/S: 5.3Price/Book: 3.72EV/EBITDA: 11.89
Market Cap: $3.92BAvg. Daily Volume: 480,66752 Week Range: $60.31 – $79

4. News Corporation (NWS): $14.65

Director James R. Murdoch sold 613,425 shares of this media company for $15.64, generating $9.59 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 31.17Forward P/E: N/AIndustry P/E: N/A
P/S: 0.99Price/Book: 0.67EV/EBITDA: 9.07
Market Cap: $8.50BAvg. Daily Volume: 1,402,81052 Week Range: $14.09 – $18.03

5. Henry Schein, Inc. (HSIC): $133.8

Chairman, CEO Stanley M. Bergman sold 69,600 shares of this healthcare products & services company for $135.56, generating $9.44 million from the sale. 34,832 of these shares were sold indirectly through a trust and 34,678 shares were sold indirectly by Mr. Bergman’s spouse.

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

P/E: 25.13Forward P/E: 22.45Industry P/E: 25.36
P/S: 1.12Price/Book: 4.05EV/EBITDA: 14.36
Market Cap: $11.27BAvg. Daily Volume: 532,26252 Week Range: $109.34 – $138.41

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

Voluntary Disclosure: I hold long positions in Twitter (TWTR), Titan International (TWI) and Freeport-McMoRan (FCX).

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