Insider Weekends – Insiders of REITs Continue Buying Into Weakness

Welcome to edition 402 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $152.83 million of stock compared to $43.35 million in the week prior. Selling also increased with insiders selling $2.14 billion of stock last week compared to $1.88 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 to 14.02. In other words, insiders sold about 14 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 43.44.

Insider Sell Buy Ratio March 2, 2018

Insider Sell Buy Ratio March 2, 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. DDR Corp. (DDR): $7.92

Director Alexander Otto acquired 1,351,558 shares of this shopping center REIT, paying $7.81 per share for a total amount of $10.56 million. Mr. Otto increased his stake by 2.79% to 49,721,192 shares with this purchase.

DDR also topped our list last week after a $9.44 million purchase by Mr. Otto. With the recent decline in REITs, we are seeing broad-based buying of REITs by insiders. Three other REITs with insider buying last week that did not make our top 5 list include the retail REITs Store Capital (STOR) and Kimco Realty (KIM) and the hotel REIT Chatham Lodging Trust (CLDT).

With rising interest rates I expect continued weakness in REITs with a long bottoming out process but some of them are starting to look interesting enough to warrant a deeper look.

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

P/E: N/A Forward P/E: 60.92 Industry P/E: 31.38
P/S: 3.19 Price/Book: 1.0968 EV/EBITDA: 10.94
Market Cap: $2.91B Avg. Daily Volume: 5,147,855 52 Week Range: $6.77 – $14.38

2. American Assets Trust, Inc. (AAT): $31.76

Chairman, CEO & President Ernest S. Rady acquired 197,015 shares of this diversified REIT, paying $31.99 per share for a total amount of $6.3 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: 51.06 Forward P/E: 52.07 Industry P/E: 31.38
P/S: 6.59 Price/Book: 1.79 EV/EBITDA: 15.75
Market Cap: $2.05B Avg. Daily Volume: 236,923 52 Week Range: $30.62 – $44.83

3. La Jolla Pharmaceutical Company (LJPC): $30.69

Shares of this biopharmaceutical company were acquired by 2 insiders:

  • Director Kevin C. Tang acquired 190,000 shares, paying $31.45 per share for a total amount of $5.97 million. These shares were purchased indirectly by Tang Capital Partners, LP.
  • Chief Operating Officer Jennifer Carver acquired 1,000 shares, paying $32.47 per share for a total amount of $32,475. Ms. Carver increased her stake by 22.22% to 5,500 shares with this purchase.

You can view the list of recent insider transactions for La Jolla Pharmaceutical Company here.

P/E: N/A Forward P/E: -11.71 Industry P/E: 203.44
P/S: N/A Price/Book: 8.34 EV/EBITDA: -5.19
Market Cap: $680.34M Avg. Daily Volume: 615,220 52 Week Range: $22.68 – $41.36

4. Parsley Energy, Inc. (PE): $25.55

Shares of this independent oil and natural gas company were acquired by 5 insiders:

  • Chairman and Chief Executive Officer Bryan Sheffield acquired 189,500 shares, paying $26.34 per share for a total amount of $4.99 million. Mr. Sheffield increased his stake by 1.67% to 11,533,063 shares with this purchase.
  • Director A. R. Alameddine acquired 10,000 shares, paying $25.99 per share for a total amount of $259,900. Mr. Alameddine increased his stake by 9.79% to 112,128 shares with this purchase.
  • Director Jerry Windlinger acquired 3,000 shares, paying $25.48 per share for a total amount of $76,440. Mr. Windlinger increased his stake by 26.53% to 14,307 shares with this purchase.
  • Director David Henry Smith acquired 2,000 shares, paying $25.35 per share for a total amount of $50,700. Mr. Smith increased his stake by 5.48% to 38,501 shares with this purchase.
  • Director Ron Brokmeyer acquired 2,000 shares, paying $25.66 per share for a total amount of $51,320. Mr. Brokmeyer increased his stake by 17.06% to 13,724 shares with this purchase.

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

P/E: 218.38 Forward P/E: 12.97 Industry P/E: 8.85
P/S: 8.31 Price/Book: 1.37 EV/EBITDA: 13.81
Market Cap: $8.03B Avg. Daily Volume: 5,649,071 52 Week Range: $21.121 – $33.07

5. Continental Resources, Inc. (CLR): $49.5

CEO & Chairman Harold Hamm acquired 99,028 shares of this oil & gas company, paying $50.26 per share for a total amount of $4.98 million. Mr. Hamm increased his stake by 7.84% to 1,361,978 shares with this purchase.

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

P/E: 23.46 Forward P/E: 19.49 Industry P/E: 8.85
P/S: 6.51 Price/Book: 3.58 EV/EBITDA: 10.58
Market Cap: $18.37B Avg. Daily Volume: 2,373,588 52 Week Range: $29.08 – $58.89

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $176.62

Shares of Facebook were sold by 3 insiders:

  • COB and CEO Mark Zuckerberg sold 685,400 shares for $182.96, generating $125.4 million from the sale. These shares were sold indirectly through various entities.
  • VP Bus. & Marketing Partnerships David B. Fischer sold 17,830 shares for $184.35, generating $3.29 million from the sale.
  • Chief Financial Officer David M. Wehner sold 14,901 shares for $178.79, generating $2.66 million from the sale.

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

P/E: 32.77 Forward P/E: 19.98 Industry P/E: 36.33
P/S: 12.621 Price/Book: 6.90 EV/EBITDA: 21.332
Market Cap: $513.08B Avg. Daily Volume: 22,197,708 52 Week Range: $136.51 – $195.32

2. Intuit Inc. (INTU): $168.84

Shares of this accounting and tax software company were sold by 2 insiders:

  • Chair of Exec. Committee Scott D. Cook sold 366,668 shares for $171.03, generating $62.7 million from the sale. These shares were sold indirectly through trusts.
  • EVP, Chief Technology Officer Henry Tayloe Stansbury sold 9,666 shares for $171.59, generating $1.66 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 Intuit Inc. here.

P/E: 44.7 Forward P/E: 26.67 Industry P/E: 34.24
P/S: 7.96 Price/Book: 35.89 EV/EBITDA: 25.94
Market Cap: $43.24B Avg. Daily Volume: 1,361,236 52 Week Range: $114.8 – $177.51

3. Twitter, Inc. (TWTR): $33

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 546,300 shares for $31.91, generating $17.43 million from the sale. These shares were sold indirectly through various entities.
  • Chief Accounting Officer Robert Kaiden sold 3,342 shares for $31.77, generating $106,186 from the sale. These shares were sold indirectly through a  trust.

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

P/E: N/A Forward P/E: 48.53 Industry P/E: 36.33
P/S: 10.05 Price/Book: 4.85 EV/EBITDA: 62.01
Market Cap: $24.56B Avg. Daily Volume: 27,977,965 52 Week Range: $14.12 – $35

4. BeiGene, Ltd. (BGNE): $150.72

Shares of this clinical-stage biopharmaceutical company were sold by 2 insiders:

  • Chief Executive Officer John Oyler sold 99,000 shares for $145.63, generating $14.42 million from the sale.
  • EVP and Global Head of Business Development Ji Li sold 10,000 shares for $146.88, generating $1.47 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 BeiGene, Ltd. here.

P/E: N/A Forward P/E: -21.11 Industry P/E: 203.44
P/S: 33.64 Price/Book: 10.23 EV/EBITDA: -62.53
Market Cap: $8.02B Avg. Daily Volume: 339,696 52 Week Range: $34.36 – $164.15

5. Moelis & Company (MC): $51.15

Shares of this global investment bank were sold by 8 insiders:

  • MD & Co-President Navid Mahmoodzadegan sold 86,938 shares for $50.72, generating $4.41 million from the sale.
  • Chairman and CEO Kenneth Moelis sold 49,116 shares for $50.00, generating $2.46 million from the sale.
  • MD & Vice Chairman J. Richard Leaman sold 31,140 shares for $50.71, generating $1.58 million from the sale.
  • Chief Operating Officer Elizabeth Crain sold 17,164 shares for $50.66, generating $869,466 from the sale.
  • Chief Financial Officer Joseph Simon sold 10,202 shares for $50.76, generating $517,824 from the sale.
  • General Counsel and Secretary Osamu R. Watanabe sold 5,185 shares for $50.00, generating $259,250 from the sale.
  • ED & Principal Acct Officer Christopher Callesano sold 1,360 shares for $50.51, generating $68,694 from the sale.

You can view the list of recent insider transactions for Moelis & Company here.

P/E: 57.86 Forward P/E: 17.64 Industry P/E: 19.12
P/S: 4.18 Price/Book: 5.06 EV/EBITDA: N/A
Market Cap: $2.86B Avg. Daily Volume: 307,791 52 Week Range: $34.6 – $54.357

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 and Plus members.

Disclaimer: I hold a long position in Twitter (TWTR). 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

Leave A Comment

You must be logged in to post a comment.