Insider Weekends – 8th Anniversary Edition

Welcome to the 8th anniversary edition of Insider Weekends. Publishing these series of posts continuously for eight years would not have been possible with the support of our wonderful staff and the technology our programmers built to help us extract and organize the data for insider transactions, mergers, spinoffs and more recently stock buybacks. We added two new features for premium subscribers related to stock buyback announcements and merger deal alerts last week and built the double dipper screen a few weeks ago. We have reinvested most of our revenue from the premium subscription business back into the website and hope to build out the premium destination for event-driven investors on the web.

Getting back to our regular programming, insider buying decreased almost by half last week with insiders purchasing $59.2 million of stock compared to $119.66 million in the week prior. Selling also decreased with insiders selling $1.61 billion of stock last week compared to $1.76 million 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 went up to 27.22. In other words, insiders sold more than 27 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 14.69.

Sector Heat Map of Management Insider Purchases June 1, 2018

Sector Heat Map of Management Insider Purchases June 1, 2018 (click to enlarge)

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. Dova Pharmaceuticals, Inc. (DOVA): $28.81

Shares of this pharmaceutical company were acquired by 2 insiders:

  • Director Paul B. Manning acquired 147,000 shares, paying $26.58 per share for a total amount of $3.91 million. Mr. Manning increased his stake by 1.19% to 12,487,823 shares with this purchase.
  • Director Steven M. Goldman acquired 15,000 shares, paying $26.41 per share for a total amount of $396,150. Mr. Goldman increased his stake by 16.27% to 107,169 shares with this purchase.

This young pharmaceutical company that was founded as recently as 2016 and that went public in 2017, received FDA approval last month for its drug to treat the disease thrombocytopenia in patients with chronic liver disease.

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

P/E: N/A Forward P/E: -32.37 Industry P/E: 222.69
P/S: N/A Price/Book: 12.08 EV/EBITDA: N/A
Market Cap: $812.19M Avg. Daily Volume: 253,533 52 Week Range: $16.98 – $37

2. Entercom Communications Corp. (ETM): $6.9

Chairman Emeritus Joseph M. Field acquired 550,000 shares of this radio broadcasting company, paying $6.94 per share for a total amount of $3.82 million. These shares were purchased indirectly through a trust. This purchase is more than double what he purchased last week when we wrote the following,

Mr. Field’s enthusiasm for Entercom has not dampened despite a large decline in the stock after first quarter 2018 results missed expectations on both the top line and the bottom line. This was the first quarter of operations after Entercom Communications merged with CBS Radio. For the month of May, Mr. Field picked up 943,062 shares for $7.6 million. You can check out a full write-up of Entercom by Vetle Forsland here or a quick summary on page 14 of Focused Compounding’s letter here.

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

P/E: 1.57 Forward P/E: 5.79 Industry P/E: 27.46
P/S: 1.64 Price/Book: 0.56 EV/EBITDA: 31.63
Market Cap: $974.76M Avg. Daily Volume: 2,243,573 52 Week Range: $6.3 – $12.43

3. DISH Network Corporation (DISH): $32.08

Shares of Dish Network were acquired by 2 insiders:

  • Chairman Charles W. Ergen acquired 100,000 shares, paying $29.37 per share for a total amount of $2.94 million. Mr. Ergen increased his stake by 16.77% to 696,470 shares with this purchase.
  • Executive Vice President James Defranco acquired 10,000 shares, paying $29.20 per share for a total amount of $292,000. Mr. Defranco increased his stake by 0.88% to 1,143,529 shares with this purchase.

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

P/E: 7.88 Forward P/E: 14.65 Industry P/E: 27.46
P/S: 1.06 Price/Book: 2.16 EV/EBITDA: 10.39
Market Cap: $14.99B Avg. Daily Volume: 2,742,446 52 Week Range: $28.8 – $66.5

4. Versartis, Inc. (VSAR): $2.15

Director Srinivas Akkaraju acquired 1,055,485 shares of this biotechnology company, paying $1.81 per share for a total amount of $1.91 million. These shares were purchased indirectly by Samsara BioCapital, L.P.

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

P/E: N/A Forward P/E: -0.55 Industry P/E: 222.69
P/S: 1.94 Price/Book: 0.93 EV/EBITDA: 0.29
Market Cap: $77.58M Avg. Daily Volume: 559,401 52 Week Range: $1.35 – $22.1

5. United Continental Holdings, Inc. (UAL): $69.99

Director Edward Shapiro acquired 25,000 shares of this airline, paying $69.15 per share for a total amount of $1.73 million. Mr. Shapiro increased his stake by 24.34% to 127,707 shares with this purchase.

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

P/E: 9.51 Forward P/E: 7.57 Industry P/E: 12.42
P/S: 0.51 Price/Book: 2.35 EV/EBITDA: 5.22
Market Cap: $19.41B Avg. Daily Volume: 3,473,020 52 Week Range: $56.51 – $81.39

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $189.1

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 1,134,600 shares for $192.27, generating $218.15 million from the sale. These shares were sold indirectly by various entities.
  • VP and General Counsel Colin Stretch sold 750 shares for $191.00, generating $143,250 from the sale.

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

P/E: 31.3 Forward P/E: 20.67 Industry P/E: 34.89
P/S: 12.28 Price/Book: 7.07 EV/EBITDA: 19.41
Market Cap: $547.37B Avg. Daily Volume: 33,726,979 52 Week Range: $144.56 – $195.32

2. Walmart Inc. (WMT): $84.36

Shares of Walmart were sold by 4 insiders:

  • Director Robson S. Walton sold 1,190,271 shares for $84.65, generating $100.75 million from the sale. These shares were sold indirectly through a trust.
  • Executive Vice President John R. Furner sold 18,500 shares for $85.01, generating $1.57 million from the sale.
  • Executive Vice President Jacqueline P. Canney sold 8,005 shares for $84.51, generating $676,503 from the sale.
  • Senior Vice President David Chojnowski sold 5,442 shares for $85.30, generating $464,176 from the sale.

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

P/E: 25.72 Forward P/E: 16.87 Industry P/E: 96
P/S: 0.49 Price/Book: 3.19 EV/EBITDA: 9.04
Market Cap: $248.93B Avg. Daily Volume: 9,864,123 52 Week Range: $73.13 – $109.98

3. CarGurus, Inc. (CARG): $34.95

Shares of this online auto shopping company were sold by 5 insiders:

  • Director Anastasios Parafestas sold 1,625,391 shares for $33.10, generating $53.79 million from the sale. These shares were sold indirectly by sold indirectly by Argonaut 22 LLC.
  • Director Stephen Kaufer sold 400,000 shares for $33.11, generating $13.24 million from the sale.
  • CEO, President and Chairman Langley Steinert sold 234,812 shares for $33.45, generating $7.86 million from the sale. 23,480 of these shares were sold indirectly through a trust.
  • Director Ian G. Smith sold 10,600 shares for $33.06, generating $350,383 from the sale.
  • Sr. VP, Engineering Oliver Ian Chrzan sold 6,000 shares for $32.65, generating $195,900 from the sale.

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

P/E: 291.25 Forward P/E: 134.42 Industry P/E: 34.89
P/S: 11.91 Price/Book: 29.19 EV/EBITDA: 173.88
Market Cap: $3.77B Avg. Daily Volume: 691,155 52 Week Range: $25.85 – $40.6

4. Workday, Inc. (WDAY): $123.9

Shares of this application software company were sold by 3 insiders:

  • Director David A. Duffield sold 389,988 shares for $128.24, generating $50.01 million from the sale.
  • Chief Executive Officer Aneel Bhusri sold 75,000 shares for $128.68, generating $9.65 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-President Gomez Luciano Fernandez sold 11,447 shares for $126.63, generating $1.45 million from the sale.

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

P/E: N/A Forward P/E: 74.19 Industry P/E: 36.99
P/S: 12.44 Price/Book: 16.62 EV/EBITDA: -160.8
Market Cap: $26.65B Avg. Daily Volume: 1,624,763 52 Week Range: $92.79 – $139.9

5. American Eagle Outfitters, Inc. (AEO): $24.02

Shares of this apparel chain were sold by 3 insiders:

  • Exec Chairman & CEO Jay L. Schottenstein sold 1,950,000 shares for $24.13, generating $47.05 million from the sale. 1,781,693 of these shares were sold indirectly through various entities.
  • EVP, Chief Operations Officer Michael R. Rempell sold 140,075 shares for $23.86, generating $3.34 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Global Brand President-AE Charles F. Kessler sold 8,666 shares for $22.75, generating $197,152 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 American Eagle Outfitters, Inc. here.

P/E: 21.26 Forward P/E: 15.11 Industry P/E: 31.8
P/S: 1.12 Price/Book: 3.42 EV/EBITDA: 6.93
Market Cap: $4.24B Avg. Daily Volume: 4,253,852 52 Week Range: $10.23 – $24.5

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 long positions in Workday (WDAY) and Entercom Communications (ETM). 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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