Insider Weekends – CEO of SOHU Turns Bullish

Welcome to edition 338 of Insider Weekends. Insider buying more than doubled last week with insiders buying $138.18 million of stock compared to $57.41 million in the week prior. Selling on the other hand decreased with insiders selling $1.22 billion of stock last week compared to $1.66 billion in the week prior.

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 8.85. 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 28.93. 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 9, 2016

Insider Sell Buy Ratio December 9, 2016

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. The Medicines Company (MDCO): $34.85

Shares of this pharmaceutical company were acquired by 2 insiders:

  • Director Fredric N. Eshelman acquired 621,720 shares, paying $33.77 per share for a total amount of $20.99 million. Mr. Eshelman increased his stake by 204.90% to 925,146 shares with this purchase.
  • EVP & Chief Corp. Dev. Officer Christopher T. Cox acquired 105,500 shares, paying $33.20 per share for a total amount of $3.5 million. These shares were purchased indirectly by Mr. Cox’s family.

You can view the list of recent insider transactions for The Medicines Company here.

P/E: N/A Forward P/E: N/A Industry P/E: 28.13
P/S: 10.98 Price/Book: 3.02 EV/EBITDA: -9.84
Market Cap: $2.42B Avg. Daily Volume: 1,350,280 52 Week Range: $27.5 – $41.79

2. Terrapin 3 Acquisition Corporation (TRTL): $9.99

Shares of this holding company were acquired by 2 insiders:

  • Director Nathan Leight acquired 1,834,500 shares, paying $9.85 per share for a total amount of $18.07 million. Mr. Leight increased his stake by -143.66% to 557,500 shares with this purchase. These shares were purchased indirectly by various trusts and entities.
  • CFO and COO Guy Barudin acquired 900 shares, paying $10.02 per share for a total amount of $9,014.

This was an interesting purchase because Terrapin 3 Acquisition Corporation, as the name suggests, was set up to acquire or merge into another business and it does not have any operations of its own. In the company’s own words, it is a publicly traded blank check company.

That blank check will however be cashed soon as the company has called for a shareholder meeting on December 12 to approve its merger with Yatra Online, an India-based online travel agency for an enterprise value of $218 million. Yatra reminds me of MakeMyTrip.com (MMYT), another India-based online travel company that has an enterprise value of just over $1 billion.

You can view the list of recent insider transactions for Terrapin 3 Acquisition Corporation here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: 12.91 EV/EBITDA: N/A
Market Cap: $64.52M Avg. Daily Volume: 50,553 52 Week Range: $9.8 – $10.25

3. Innovative Industrial Properties, Inc. (IIPR): $16.95

Shares of this real estate company with a specific focus on industrial properties were acquired by 4 insiders:

  • Executive Chairman Alan D. Gold acquired 200,700 shares, paying $20.00 per share for a total amount of $4.01 million.
  • Director Gary A. Kreitzer acquired 25,000 shares, paying $20.00 per share for a total amount of $500,000.
  • President, CEO and Director Paul E. Smithers acquired 4,000 shares, paying $15.50 per share for a total amount of $61,987.
  • CFO and EVP, Investments Robert M. Sistek acquired 400 shares, paying $18.34 per share for a total amount of $7,336.

This is the first insider purchase I have seen of a company that leases properties to “state-licensed operators for their regulated medical-use cannabis facilities”. I wonder if California’s decision to legalize marijuana is fueling the optimism of these insiders.

You can view the list of recent insider transactions for Innovative Industrial Properties, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 1.55 Price/Book: 17 EV/EBITDA: 1.53
Market Cap: $170.56M Avg. Daily Volume: 377,283 52 Week Range: $14.50 – $20.52

4. Sohu.com Inc. (SOHU): $36.75

CEO Charles Zhang acquired 48,000 shares of this Chinese online media company, paying $34.27 per share for a total amount of $1.64 million. These shares were purchased indirectly by Photon Group Limited.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 0.82 Price/Book: 1.29 EV/EBITDA: 0.44
Market Cap: $1.42B Avg. Daily Volume: 248,206 52 Week Range: $32.6 – $59.5

5. Paramount Group, Inc. (PGRE): $16.56

Director Katharina Otto-Bernstein acquired 100,000 shares of this real estate firm, paying $15.59 per share for a total amount of $1.56 million. Mr. Otto-Bernstein increased his stake by 0.83% to 12,131,489 shares with this purchase.

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

P/E: 871.58 Forward P/E: N/A Industry P/E: N/A
P/S: 5.4 Price/Book: 0.96 EV/EBITDA: 17.87
Market Cap: $4.41B Avg. Daily Volume: 828,517 52 Week Range: $14.23 – $18.28

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

Notable Insider Sales:

1. Workday, Inc. (WDAY): $70.65

Shares of this application software company were sold by 4 insiders:

  • Chairman David A. Duffield sold 400,000 shares for $73.19, generating $29.28 million from the sale.
  • Chief Executive Officer Aneel Bhusri sold 75,000 shares for $71.73, generating $5.38 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Michael M. McNamara sold 15,832 shares for $73.18, generating $1.16 million from the sale. These shares were sold indirectly through a trust.
  • Chief Financial Officer Robynne Sisco sold 3,008 shares for $74.39, generating $223,762 from the sale. 1,500 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 Workday, Inc. here.

P/E: N/A Forward P/E: 252.32 Industry P/E: 50.88
P/S: 9.91 Price/Book: 12.69 EV/EBITDA: -52.43
Market Cap: $14.20B Avg. Daily Volume: 1,755,660 52 Week Range: $47.32 – $93.35

2. Western Alliance Bancorporation (WAL): $49.73

Shares of this regional bank were sold by 8 insiders:

  • Director Steven J. Hilton sold 121,000 shares for $48.04, generating $5.81 million from the sale. These shares were sold indirectly through various trusts and entities.
  • Chairman and CEO Robert Gary Sarver sold 100,000 shares for $47.71, generating $4.77 million from the sale.
  • Director Nafees M. Nagy sold 50,000 shares for $48.04, generating $2.4 million from the sale. These shares were sold indirectly by Sajan Alliance, LLC.
  • EVP, Chief Admin Officer Merrill Wall sold 37,805 shares for $48.32, generating $1.83 million from the sale.
  • Director Todd Marshall sold 35,000 shares for $48.12, generating $1.68 million from the sale. 25,000 of these shares were sold indirectly through a trust.
  • Director Bruce D. Beach sold 7,377 shares for $47.70, generating $351,883 from the sale. These shares were sold indirectly through a trust.
  • EVP, Arizona Administration James Harwood Lundy sold 5,782 shares for $48.49, generating $280,369 from the sale.
  • EVP and CFO Dale Gibbons sold 5,000 shares for $47.70, generating $238,500 from the sale.

You can view the list of recent insider transactions for Western Alliance Bancorporation here.

P/E: 20.6 Forward P/E: 17.21 Industry P/E: 16.96
P/S: 7.95 Price/Book: 2.82 EV/EBITDA: N/A
Market Cap: $5.07B Avg. Daily Volume: 736,255 52 Week Range: $26.6 – $50.72

3. Headwaters Incorporated (HW): $23.58

Shares of this general building materials company were sold by 4 insiders:

  • Chief Executive Officer Kirk A. Benson sold 516,345 shares for $23.56, generating $12.17 million from the sale.
  • Chief Financial Officer Donald P. Newman sold 85,413 shares for $23.66, generating $2.02 million from the sale.
  • Pres. HW Stone Div. Brent Spann sold 10,630 shares for $23.58, generating $250,633 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • General Counsel Harlan M. Hatfield sold 9,889 shares for $23.57, generating $233,087 from the sale.

You can view the list of recent insider transactions for Headwaters Incorporated here.

P/E: 36.79 Forward P/E: 15.21 Industry P/E: 25.7
P/S: 1.79 Price/Book: 6 EV/EBITDA: 14.06
Market Cap: $1.75B Avg. Daily Volume: 1,199,970 52 Week Range: $13.62 – $23.99

4. QVC Group (QVCA): $20.81

Director Mark C. Vadon sold 616,810 shares of this online and television-based commerce company for $20.50, generating $12.64 million from the sale. These shares were sold indirectly by Lake Tana LLC.

You can view the list of recent insider transactions for QVC Group here.

P/E: 20.01 Forward P/E: 17.94 Industry P/E: 46.63
P/S: 0.95 Price/Book: 1.97 EV/EBITDA: 8.91
Market Cap: $9.81B Avg. Daily Volume: 3,620,800 52 Week Range: $17.88 – $27.58

5. WebMD Health Corp. (WBMD): $53.02

Shares of this health information services provider were sold by 6 insiders:

  • Chairman of the Board Martin J. Wygod sold 95,000 shares for $53.37, generating $5.07 million from the sale. These shares were sold indirectly through a trust.
  • Director Joseph E. Smith sold 25,821 shares for $53.28, generating $1.38 million from the sale.
  • Director Mark J. Adler M.D. sold 19,029 shares for $53.37, generating $1.02 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Neil F. Dimick sold 18,740 shares for $52.84, generating $990,222 from the sale.
  • Director Stanley S. Trotman Jr. sold 14,520 shares for $53.41, generating $775,519 from the sale.
  • Director Jerome C. Keller sold 13,888 shares for $52.86, generating $734,120 from the sale.

You can view the list of recent insider transactions for WebMD Health Corp. here.

P/E: 29.62 Forward P/E: 26.64 Industry P/E: 61.35
P/S: 2.89 Price/Book: 7.05 EV/EBITDA: 11.3
Market Cap: $1.96B Avg. Daily Volume: 731,531 52 Week Range: $45.46 – $67.55

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

Disclaimer: I hold a long position in Workday (WDAY). 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria

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