Insider Weekends – Director of Wynn Makes a $3.5 Million Purchase

Welcome to edition 339 of Insider Weekends. Insider buying decreased last week with insiders buying $64.58 million of stock compared to $138.18 million in the week prior. Selling on the other hand increased with insiders selling $1.68 billion of stock last week compared to $1.22 billion in the week prior.

After a 3% rally in the prior week, the S&P 500 ended up essentially flat last week and insider buying was also muted as we approach the end of the quarter. It has been challenging to find good investing ideas on the long side in this market. Since the presidential election, the spreads on mergers have also narrowed considerably, making my fall back strategy of merger arbitrage also less appealing. Hopefully there are still opportunities out there and the insiders just might point us to where they are lurking. Until that happens, I am taking a more conservative approach to my portfolio.

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 up to 25.99. In other words, insiders sold almost 26 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 8.85. 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 16, 2016

Insider Sell Buy Ratio December 16, 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. Newcastle Investment Corp. (NCT): $4.1

Director Wesley R. Edens acquired 2,172,000 shares of this mortgage REIT, paying $4.15 per share for a total amount of $9.01 million.  1,642,000 of these shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Newcastle Investment Corp. here.

P/E: 3.19 Forward P/E: 8.72 Industry P/E: 11.8
P/S: 0.71 Price/Book: 1.45 EV/EBITDA: 16.7
Market Cap: $273.61M Avg. Daily Volume: 479,092 52 Week Range: $2.55 – $4.88

2. Wynn Resorts, Limited (WYNN): $91.9

Director Daniel Boone Wayson acquired 37,500 shares of this resorts & casinos operator, paying $93.83 per share for a total amount of $3.52 million. Mr. Wayson increased his stake by 68.79% to 92,010 shares with this purchase.

This purchase is unusual because Mr. Wayson sold 37,500 shares of Wynn just last month. Both the sale and purchase were direct transactions and hence do not appear to be related to end-of-year tax planning. Mr. Wayson has been a director of Wynn since 2003.

You can view the list of recent insider transactions for Wynn Resorts, Limited here.

P/E: 43.35 Forward P/E: 21.67 Industry P/E: 25.43
P/S: 2.24 Price/Book: N/A EV/EBITDA: 19.08
Market Cap: $9.35B Avg. Daily Volume: 3,220,050 52 Week Range: $49.95 – $109.5

3. Viacom, Inc. (VIA): $39.50

Shares of this media and entertainment company were acquired by 2 insiders:

  • President and CEO Robert M. Bakish acquired 30,000 shares, paying $34.85 per share for a total amount of $1.05 million.
  • Director Ronald L. Nelson acquired 20,000 shares, paying $34.80 per share for a total amount of $696,000.

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

P/E: 10.93 Forward P/E: N/A Industry P/E: 7.17
P/S: 1.16 Price/Book: 3.67 EV/EBITDA: 9.18
Market Cap: $14.44B Avg. Daily Volume: 122,880 52 Week Range: $33.88 – $50.81

4. Intrexon Corporation (XON): $28.35

Shares of this biotech company were acquired by 2 insiders:

  • Chief Executive Officer Randal J. Kirk acquired 34,606 shares, paying $28.90 per share for a total amount of $1 million. These shares were purchased indirectly by ADC 2010.
  • SVP, Finance Joel D. Liffman acquired 8,500 shares, paying $28.62 per share for a total amount of $243,265. Mr. Liffman increased his stake by 5.67% to 158,500 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: 33
P/S: 18.05 Price/Book: 5.6 EV/EBITDA: -31.49
Market Cap: $3.36B Avg. Daily Volume: 1,189,700 52 Week Range: $18.52 – $40.24

5. Inovalon Holdings, Inc. (INOV): $9.4

Shares of this cloud-based data analytics company were acquired by 2 insiders:

  • CEO and Chairman of the Board Keith R. Dunleavy acquired 100,000 shares, paying $9.21 per share for a total amount of $920,890. Mr. Dunleavy increased his stake by 125.00% to 180,000 shares with this purchase.
  • Director William D. Green acquired 30,000 shares, paying $9.29 per share for a total amount of $278,799. Mr. Green increased his stake by 78.22% to 68,351 shares with this purchase.

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

P/E: 33.57 Forward P/E: 26.11 Industry P/E: 46.74
P/S: 2.99 Price/Book: 1.88 EV/EBITDA: 9.94
Market Cap: $592.73M Avg. Daily Volume: 983,728 52 Week Range: $8.6 – $20.05

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $119.87

Shares of Facebook were sold by 5 insiders:

  • COB and CEO Mark Zuckerberg sold 799,481 shares for $118.83, generating $94.99 million from the sale. These shares were sold indirectly through various entities.
  • Chief Operating Officer Sheryl Sandberg sold 109,000 shares for $118.22, generating $12,885,581 from the sale. These shares were acquired upon the conversion of Class B Common Stock to Class A Common Stock in connection with the exercise of stock options.
  • Chief Technology Officer Michael Todd Schroepfer sold 38,019 shares for $120.35, generating $4,575,467 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Product Officer Christopher K. Cox sold 15,600 shares for $118.54, generating $1,849,146 from the sale.
  • VP and General Counsel Colin Stretch sold 750 shares for $119.95, generating $89,960 from the sale.

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

P/E: 46.21 Forward P/E: 23.01 Industry P/E: 26.93
P/S: 14.09 Price/Book: 6.41 EV/EBITDA: 24.83
Market Cap: $345.49B Avg. Daily Volume: 21,957,800 52 Week Range: $89.37 – $133.5

2. Arista Networks, Inc. (ANET): $96.68

Shares of this networking solutions provider were sold by 2 insiders:

  • President and CEO Jayshree Ullal sold 225,791 shares for $97.98, generating $22.12 million from the sale. These shares were sold indirectly through various trusts.
  • Sr. VP, Worldwide Sales Mark Stephen Smith sold 5,000 shares for $96.96, generating $484,789 from the sale. These shares were sold indirectly through a trust.

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

P/E: 41.82 Forward P/E: 28.19 Industry P/E: 21.44
P/S: 6.49 Price/Book: 6.71 EV/EBITDA: 25.75
Market Cap: $6.79B Avg. Daily Volume: 707,800 52 Week Range: $52.51 – $98.9

3. Validus Holdings, Ltd. (VR): $52.86

Shares of this insurance company were sold by 3 insiders:

  • Chairman and CEO Edward J. Noonan sold 273,000 shares for $55.40, generating $15.12 million from the sale.
  • CEO, Validus Reinsurance, Ltd. Kean Driscoll sold 4,151 shares for $53.43, generating $221,788 from the sale.
  • Director Matthew J. Grayson sold 180 shares for $55.51, generating $9,992 from the sale.

You can view the list of recent insider transactions for Validus Holdings, Ltd. here.

P/E: 10.49 Forward P/E: 12.65 Industry P/E: 14.09
P/S: 1.73 Price/Book: 1.14 EV/EBITDA: -5.08
Market Cap: $4.40B Avg. Daily Volume: 497,559 52 Week Range: $41.73 – $56.41

4. The Boston Beer Company, Inc. (SAM): $170.25

Chairman James C. Koch sold 75,000 shares of this beverage company for $170.91, generating $12.82 million from the sale.

You can view the list of recent insider transactions for The Boston Beer Company, Inc. here.

P/E: 27.27 Forward P/E: 26.15 Industry P/E: 25.3
P/S: 2.33 Price/Book: 4.67 EV/EBITDA: 11.43
Market Cap: $2.11B Avg. Daily Volume: 209,636 52 Week Range: $145.3 – $207.78

5. Schlumberger Limited (SLB): $85.5

Shares of this oil services company were sold by 3 insiders:

  • Vice President and Treasurer Imran Kizilbash sold 134,091 shares for $86.35, generating $11.58 million from the sale.
  • President, Cameron Group Robert Scott Rowe sold 4,870 shares for $85.93, generating $418,479 from the sale. These shares were sold indirectly through a trust.
  • Vice President-Director of Tax Mark Danton sold 2,430 shares for $86.09, generating $209,189 from the sale.

You can view the list of recent insider transactions for Schlumberger Limited here.

P/E: N/A Forward P/E: 44.07 Industry P/E: 20.92
P/S: 4.17 Price/Book: 2.81 EV/EBITDA: 19
Market Cap: $118.96B Avg. Daily Volume: 5,905,510 52 Week Range: $59.6 – $86.82

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

Disclaimer: 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.

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