Insider Weekends – Director of Transocean Adds to His Significant Stake

Welcome to edition 403 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $420.25 million of stock compared to $152.83 million in the week prior. Selling also increased with insiders selling $3.05 billion of stock last week compared to $2.14 billion in the week prior. A large part of the insider buying last week was driven by 10% owner Bill Gates adding to his stake in Ecolab (ECL) to the tune of $177 million indirectly through his investment company Cascade Investments, LLC.

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 7.25. In other words, insiders sold more than 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 14.02.

Insider Sell Buy Ratio March 9, 2018

Insider Sell Buy Ratio March 9, 2018

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. Transocean Ltd. (RIG): $9.58

Director Frederik Wilhelm Mohn acquired 2,000,000 shares of this offshore contract drilling services provider for oil and gas wells, paying $9.29 per share for a total amount of $18.58 million. These shares were purchased indirectly by Perestroika, a company solely owned by Mr. Mohn.

He became one of the largest shareholders of Transocean after it acquired the Norwegian offshore drilling company Songa Offshore earlier this year. Based on my calculations, following this purchase, he owns a little over 7% of the company but the filing for this purchase indicates that he is a 10% owner in addition to being a director of the company.

You can view the list of recent insider transactions for Transocean Ltd. here.

P/E: N/A Forward P/E: -15.45 Industry P/E: 2.79
P/S: 1.59 Price/Book: 0.29 EV/EBITDA: 7.19
Market Cap: $4.4B Avg. Daily Volume: 13,495,762 52 Week Range: $7.2 – $13.18

2. American Assets Trust, Inc. (AAT): $32.14

Chairman, CEO & President Ernest S. Rady acquired 172,676 shares of this diversified REIT, paying $32.20 per share for a total amount of $5.56 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for American Assets Trust, Inc. here.

P/E: 51.67 Forward P/E: 52.69 Industry P/E: 31.81
P/S: 6.67 Price/Book: 1.82 EV/EBITDA: 15.87
Market Cap: $2.07B Avg. Daily Volume: 252,654 52 Week Range: $30.62 – $44.83

3. Continental Resources, Inc. (CLR): $51.85

CEO & Chairman Harold Hamm acquired 57,881 shares of this oil & gas company, paying $49.57 per share for a total amount of $2.87 million. Mr. Hamm increased his stake by 4.25% to 1,419,859 shares with this purchase.

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

P/E: 24.57 Forward P/E: 20.09 Industry P/E: 8.99
P/S: 6.82 Price/Book: 3.75 EV/EBITDA: 10.82
Market Cap: $19.25B Avg. Daily Volume: 2,416,952 52 Week Range: $29.08 – $58.89

4. Prospect Capital Corporation (PSEC): $6.58

Chief Executive Officer John F. Barry acquired 259,386 shares of this business development company, paying $6.58 per share for a total amount of $1.71 million. Mr. Barry increased his stake by 0.76% to 34,200,271 shares with this purchase.

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

P/E: 7.94 Forward P/E: 8.77 Industry P/E: 8.72
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $2.38B Avg. Daily Volume: 2,369,831 52 Week Range: $5.51 – $9.45

5. Biglari Holdings Inc. (BH): $427.94

Director Sardar Biglari, acquired 3,478 shares of this holding company, paying $419.09 per share for a total amount of $1.46 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: 10.49 Forward P/E: -80.89 Industry P/E: 85.83
P/S: 1.05 Price/Book: 1.55 EV/EBITDA: 49.12
Market Cap: $884.81M Avg. Daily Volume: 6,606 52 Week Range: $290.05 – $451.15

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $185.23

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 1,125,400 shares for $178.57, generating $200.96 million from the sale. These shares were sold indirectly through various entities.
  • Chief Operating Officer Sheryl Sandberg sold 55,000 shares for $174.74, generating $9.61 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 34.37 Forward P/E: 20.95 Industry P/E: 46.82
P/S: 13.24 Price/Book: 7.24 EV/EBITDA: 21.37
Market Cap: $538.09B Avg. Daily Volume: 21,850,342 52 Week Range: $137.6 – $195.32

2. Intuit Inc. (INTU): $177.17

Chairman of Exec. Committee Scott D. Cook sold 159,556 shares of this accounting and tax software company for $170.26, generating $27.17 million from the sale. These shares were sold indirectly by trusts.

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

P/E: 48.55 Forward P/E: 28.08 Industry P/E: 35.08
P/S: 8.35 Price/Book: 39.21 EV/EBITDA: 27.95
Market Cap: $45.38B Avg. Daily Volume: 1,363,395 52 Week Range: $114.8 – $177.51

3. Glaukos Corporation (GKOS): $31.36

Director Jonathan Silverstein sold 836,500 shares of this ophthalmic medical technology company for $32.02, generating $26.79 million from the sale.

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

P/E: N/A Forward P/E: 1045.33 Industry P/E: 32.94
P/S: 6.84 Price/Book: 7.86 EV/EBITDA: 113.89
Market Cap: $1.09B Avg. Daily Volume: 548,150 52 Week Range: $23.08 – $52.48

4. Nektar Therapeutics (NKTR): $108.34

Shares of this biotech company were sold by 2 insiders:

  • SVP & Chief Operating Officer John Nicholson sold 220,144 shares for $99.27, generating $21.85 million from the sale.
  • Director Christopher A. Kuebler sold 40,000 shares for $97.60, generating $3.9 million 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 Nektar Therapeutics here.

P/E: N/A Forward P/E: -98.49 Industry P/E: 238.69
P/S: 69.82 Price/Book: 202.127 EV/EBITDA: -349.42
Market Cap: $17.43B Avg. Daily Volume: 2,512,893 52 Week Range: $14.96 – $109.32

5. The Gap, Inc. (GPS): $33.07

Shares of this apparel chain were sold by 4 insiders:

  • 10% Owner John F. Fisher sold 500,000 shares for $34.43, generating $17.22 million. These shares were sold indirectly through a trust.
  • President & CEO, GAP Jeff Kirwan sold 101,820 shares for $33.73, generating $3.43 million from the sale. 56,250 of these shares were sold as a result of exercising options immediately prior to the sale.
  • President & CEO, Old Navy Sonia Syngal sold 28,846 shares for $33.10, generating $954,780 from the sale.
  • VP & Chief Accounting Officer Dara Bazzano sold 4,066 shares for $34.00, generating $138,244 from the sale. 1,200 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 The Gap, Inc. here.

P/E: 15.24 Forward P/E: 11.94 Industry P/E: 37.74
P/S: 0.83 Price/Book: 4.25 EV/EBITDA: 6.65
Market Cap: $12.86B Avg. Daily Volume: 4,952,544 52 Week Range: $21.02 – $35.68

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

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium members.

Disclaimer: I hold a long position in Gap (GPS). 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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