Welcome to edition 291 of Insider Weekends. Last week we mentioned that the big drop marked the worst start of the year in the history of the S&P 500 index and the trend continued this week. The 9 day drop in the S&P 500 this year is also the worst in history. In isolation, this data point means little and it is hard to extrapolate this performance to the rest of the year. There are many factors that could cause the market to weaken further or recover. Will the fed continue raising rates? Will China’s economy continue to weaken? Will Canada see its real estate bubble pop? Will the U.S. dollar continue to strengthen? Will North Korea continue its chest thumping leading to an arms race between the Koreas? Has the commodities bear market bottomed? Will investors flock to Europe on account of further monetary easing across the pond? Each of these events will have an impact on the direction of the market but from the vantage point to a six year old bull market, the risk appears to be on the downside.
Insider buying declined last week with insiders buying $66.27 million of stock compared to $132.61 million in the week prior. Selling also decreased with insiders selling $212.11 million of stock last week compared to $439.57 million in the week prior. This is the lowest amount of insider selling we have seen in over four years.
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 3.2. In other words, insiders sold more than 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 3.31. 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. Conns Inc. (CONN): $13.62
Shares of this specialty retailer of home appliances were acquired by three insiders:
- 10% Owner Harriet C. Stephens acquired 120,000 shares, paying $16.76 per share for a total amount of $2.01 billion. These shares were purchased indirectly through a trust.
- 10% Owner Curtis F. Bradury Jr. acquired 29,399 shares, paying $17.01 per share for a total amount of $500,077.
- Director Douglas H. Martin acquired 21,077 shares, paying $16.46 per share for a total amount of $347,000. These shares were purchased indirectly through IRA.
You can view the list of recent insider transactions for Conns Inc. here.
|P/E: 11.07||Forward P/E: 7.02||Industry P/E: 10.21|
|P/S: 0.3||Price/Book: 0.81||EV/EBITDA: 14.7|
|Market Cap: $439.18M||Avg. Daily Volume: 830,946||52 Week Range: $13.18 – $43.95|
2. Tuesday Morning Corporation (TUES): $5.94
Chief Executive Officer Steven R. Becker acquired 1,055,467 shares of this home products retailer, paying $5.14 per share for a total amount of $5.43 million. These shares were purchased indirectly by Western Family Value, LLC.
You can view the list of recent insider transactions for Tuesday Morning Corporation here.
|P/E: 24.96||Forward P/E: 14.49||Industry P/E: 25.55|
|P/S: 0.28||Price/Book: 1.19||EV/EBITDA: 9.37|
|Market Cap: $263.30M||Avg. Daily Volume: 618,494||52 Week Range: $4.86 – $21.52|
3. FS Investment Corporation (FSIC): $7.97
Chief Executive Officer Michael C. Forman acquired 180,611 shares of this business development company, paying $8.33 per share for a total amount of $1.5 million. These shares were purchased indirectly by Franklin Square Holdings, L.P.
You can view the list of recent insider transactions for FS Investment Corporation here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: N/A||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $N/A||Avg. Daily Volume: N/A||52 Week Range: $6.91 – $10.52|
4. American Eagle Outfitters, Inc. (AEO): $14.31
Exec Chairman & CEO Jay L. Schottenstein acquired 164,257 shares of this apparel chain, paying $13.22 per share for a total amount of $2.17 million. These shares were purchased indirectly by SEI, Inc.
You can view the list of recent insider transactions for American Eagle Outfitters, Inc. here.
|P/E: 14.17||Forward P/E: 12.34||Industry P/E: 16.03|
|P/S: 0.81||Price/Book: 2.34||EV/EBITDA: 5.23|
|Market Cap: $2.79B||Avg. Daily Volume: 5,847,790||52 Week Range: $13.14 – $18.49|
5. Biglari Holdings Inc. (BH): $336.06
Chairman and CEO Sardar Biglari, acquired 6,145 shares of this restaurant holding company, paying $335.52 per share for a total amount of $2.06 million. These shares were purchased indirectly by The Lion Fund.
You can view the list of recent insider transactions for Biglari Holdings Inc. here.
|P/E: 1.65||Forward P/E: 26.25||Industry P/E: 23.14|
|P/S: 0.75||Price/Book: 1.44||EV/EBITDA: 14.26|
|Market Cap: $694.64M||Avg. Daily Volume: 3,387||52 Week Range: $321 – $459.43|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. salesforce.com, inc. (CRM): $70.86
Shares of this software-as-a-service (SaaS) provider were sold by 4 insiders:
- Chairman of the Board & CEO Marc Benioff sold 62,500 shares for $72.73, generating $4.55 million from the sale.
- Co-Founder Parker Harris sold 5,000 shares for $74.14, generating $370,700 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Craig Conway sold 400 shares for $70.00, generating $28,000 from the sale.
- Director John Victor Roos sold 267 shares for $73.97, generating $19,750 from the sale.
You can view the list of recent insider transactions for salesforce.com, inc. here.
|P/E: N/A||Forward P/E: 71.58||Industry P/E: 31.08|
|P/S: 7.7||Price/Book: 10.21||EV/EBITDA: 119.45|
|Market Cap: $47.05B||Avg. Daily Volume: 3,614,810||52 Week Range: $55.45 – $82.9|
2. Sempra Energy (SRE): $91.99
Shares of this gas utility were sold by 2 insiders:
- Executive VP and CFO Joseph A. Householder sold 23,761 shares for $91.47, generating $2.17 millio from the sale.
- Senior VP G Joyce Rowland sold 11,428 shares for $88.20, generating $1 million from the sale.
You can view the list of recent insider transactions for Sempra Energy here.
|P/E: 18.08||Forward P/E: 17.16||Industry P/E: 15.8|
|P/S: 2.25||Price/Book: 1.99||EV/EBITDA: 12.18|
|Market Cap: $22.83B||Avg. Daily Volume: 1,330,390||52 Week Range: $86.72 – $116.21|
3. Synchronoss Technologies, Inc. (SNCR): $30.6
CEO and Chairman Stephen G. Waldis sold 94,430 shares of this application software company for $30.80, generating $2.91 million from the sale. 31,430 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 Synchronoss Technologies, Inc. here.
|P/E: 28.62||Forward P/E: 12.19||Industry P/E: 31.08|
|P/S: 2.4||Price/Book: 2.23||EV/EBITDA: 8.51|
|Market Cap: $1.35B||Avg. Daily Volume: 427,883||52 Week Range: $27.86 – $52.45|
4. Huntington Ingalls Industries, Inc. (HII): $123.65
Corp VP and CFO Barbara A. Niland sold 20,261 shares of this ship building company for $130.00, generating $2.63 million from the sale.
You can view the list of recent insider transactions for Huntington Ingalls Industries, Inc. here.
|P/E: 14.85||Forward P/E: 13.18||Industry P/E: 17.4|
|P/S: 0.83||Price/Book: 3.96||EV/EBITDA: 6.73|
|Market Cap: $5.81B||Avg. Daily Volume: 313,073||52 Week Range: $102.76 – $144|
5. Vector Group Ltd. (VGR): $22.78
Director Bennett S. Lebow sold 100,000 shares of this cigarettes company for $22.93, generating $2.29 million from the sale. These shares were sold indirectly by LeBow Epsilon 2001 Limited Partnership.
You can view the list of recent insider transactions for Vector Group Ltd. here.
|P/E: 43.64||Forward P/E: 28.48||Industry P/E: 18.57|
|P/S: 2.38||Price/Book: N/A||EV/EBITDA: 12.1|
|Market Cap: $2.79B||Avg. Daily Volume: 674,690||52 Week Range: $19.64 – $25.6|
You can view the full list of sales from this Insider Sales page.
Disclaimer Clients of Signal Partners, LLC and I may have positions in any of these stocks at any time. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.