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Insider Weekends – August 28, 2015

  • August 30, 2015

Welcome to edition 271 of Insider Weekends. Insider buying increased last week with insiders buying $170.5 million of stock compared to $121.15 million in the week prior. Selling on the other hand declined sharply with insiders selling $899.89 million of stock last week compared to $2.12 billion in the week prior.

The recent market turmoil sparked renewed enthusiasm amongst insiders and generated a large number of interesting insider purchases. Four out of the top five purchases listed below have been on my watch list for some time now.

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 dropped to 5.28. In other words, insiders sold more than 5 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 17.47. 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 August 28, 2015
Insider Sell Buy Ratio August 28, 2015

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. DSW Inc. (DSW): $29.02

Executive Chairman Jay L. Schottenstein acquired 500,000 shares of this footwear retailer, paying $28.32 per share for a total amount of $14.16 million. These shares were purchased indirectly by Schottenstein Realty LLC.

DSW posted respectable second quarter earnings with a 7% increase in net sales to $627 million, a 10% increase in earnings to $38 million or 42 cents per share and a 2% increase in same store sales. Yet the stock lounges near its 52 week low despite trading for less than 7 times EBITDA and sporting a dividend yield of 2.66%. The company has a strong balance sheet with no debt and $471 million in short and long-term investments. The stock was down following second quarter results because revenue fell short of analyst expectations and inventory increased to $505 million, a 6.3% increase on a square foot basis.

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

P/E: 15.69Forward P/E: 13.95Industry P/E: 20.75
P/S: 1.01Price/Book: 2.46EV/EBITDA: 6.88
Market Cap: $2.57BAvg. Daily Volume: 1,366,33052 Week Range: $27.28 – $39.58

2. Sears Holdings Corporation (SHLD): $27.3

Chief Executive Officer Edward S. Lampert acquired 376,572 shares of this department stores chain, paying $22.61 per share for a total amount of $8.52 million. Mr. Lampert increased his stake by 1.31% to 29,037,295 shares with this purchase.

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

P/E: N/AForward P/E: N/AIndustry P/E: 19.66
P/S: 0.1Price/Book: N/AEV/EBITDA: -6.63
Market Cap: $2.91BAvg. Daily Volume: 1,344,57052 Week Range: $19.08 – $48.25

3. Southern Copper Corp. (SCCO): $27.35

Chairman of the Board German Larrea Velasco acquired 300,000 shares of this copper mining company, paying $24.91 per share for a total amount of $7.47 million. Mr. Velasco increased his stake by 18.51% to 1,920,567 shares with this purchase.

You can view the list of recent insider transactions for Southern Copper Corp. here.

P/E: 17.78Forward P/E: 15.54Industry P/E: 12.26
P/S: 3.83Price/Book: 3.7EV/EBITDA: 10.06
Market Cap: $21.80BAvg. Daily Volume: 1,695,81052 Week Range: $23.41 – $33.31

4. Shutterstock, Inc. (SSTK): $33.73

Chief Executive Officer Jonathan Oringer acquired 200,000 shares of this online photo marketplace, paying $33.29 per share for a total amount of $6.66 million. Mr. Oringer increased his stake by 1.25% to 16,256,327 shares with this purchase.

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

P/E: 58.26Forward P/E: 22.49Industry P/E: 26.05
P/S: 3.1Price/Book: 4.11EV/EBITDA: 18.99
Market Cap: $1.22BAvg. Daily Volume: 610,80652 Week Range: $28.96 – $84.06

5. Endurance Specialty Holdings Ltd. (ENH): $64.06

Chmn & Chief Executive Officer John Charman acquired 100,000 shares of this insurance company, paying $61.76 per share for a total amount of $6.18 million. Mr. Charman increased his stake by 14.06% to 811,255 shares with this purchase.

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

P/E: 8.98Forward P/E: 9.74Industry P/E: 11.83
P/S: 2.09Price/Book: 0.87EV/EBITDA: 9.16
Market Cap: $4.22BAvg. Daily Volume: 500,30852 Week Range: $53.34 – $70.5

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

Notable Insider Sales:

1. Twenty-First Century Fox, Inc. (FOX): $28.08

Executive Chairman Keith Rupert Murdoch sold 1,123,655 shares of this media and entertainment company for $27.25, generating $30.62 million from the sale. 1,000,000 of these shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Twenty-First Century Fox, Inc. here.

P/E: 7.2Forward P/E: 12.1Industry P/E: N/A
P/S: 1.95Price/Book: 3.31EV/EBITDA: 10.56
Market Cap: $56.71BAvg. Daily Volume: 4,588,39052 Week Range: $22.85 – $37.83

2. Gilead Sciences Inc. (GILD): $107.78

Chairman and CEO John C. Martin sold 133,213 shares of this biotech company for $105.17, generating $14 million from the sale. These shares were sold indirectly through a trust

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

P/E: 11.37Forward P/E: 9.26Industry P/E: 27.5
P/S: 5.43Price/Book: 9.76EV/EBITDA: 7.96
Market Cap: $158.18BAvg. Daily Volume: 10,760,70052 Week Range: $85.95 – $123.37

3. Plug Power Inc. (PLUG): $1.76

Shares of this alternative energy technology provider were sold by 2 insiders:

  • Director Xavier Pontone sold 6,394,539 shares for $1.67, generating $10.68 million from the sale. These shares were sold on behalf of venture capital firm Air Liquide Investissements d’Avenir et de Demonstration.
  • Chief Operating Officer Keith Schmid sold 14,000 shares for $1.80, generating $25,200 from the sale.

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

P/E: N/AForward P/E: N/AIndustry P/E: 14.32
P/S: 4.06Price/Book: 2.14EV/EBITDA: -4.94
Market Cap: $316.66MAvg. Daily Volume: 2,852,42052 Week Range: $1.56 – $5.64

4. MEDNAX, Inc. (MD): $81.57

Chief Executive Officer Roger Medel M.D. sold 100,000 shares of this pediatric physician services provider for $80.27, generating $8.03 million from the sale.

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

P/E: 24.1Forward P/E: 19.85Industry P/E: 36.61
P/S: 2.91Price/Book: 3.4EV/EBITDA: 14.88
Market Cap: $7.67BAvg. Daily Volume: 682,17252 Week Range: $49.82 – $86.09

5. FireEye, Inc. (FEYE): $39.19

Chief Strategy Officer Ashar Aziz sold 188,434 shares of this security software company for $37.60, generating $7.09 million from the sale. These shares were sold indirectly through a trust.

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

P/E: N/AForward P/E: N/AIndustry P/E: 33.28
P/S: 11.76Price/Book: 5.16EV/EBITDA: -14.49
Market Cap: $6.25BAvg. Daily Volume: 6,469,93052 Week Range: $24.81 – $55.33

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

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