Insider Weekends: CEO of Microsoft Sells Nearly $22 Million of Stock

Welcome to edition 436 of Insider Weekends. Insider buying increased last week with insiders purchasing $66.26 million of stock compared to $45.76 million in the week prior. Selling almost doubled with insiders selling $500.08 million of stock last week compared to $257.89 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 7.55. In other words, insiders sold almost 8 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 5.64.

Insider Sector Heat Map October 26, 2018

Insider Sector Heat Map October 26, 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. SYNNEX Corporation (SNX): $77.21

Director Matthew Miau acquired 247,111 shares of this business services company, paying $79.32 per share for a total amount of $19.6 million. These shares were purchased indirectly by Silver Star Developments Limited.

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

P/E: 11.13 Forward P/E: 6.67 Industry P/E: 20.59
P/S: 0.2 Price/Book: 1.3 EV/EBITDA: 7.64
Market Cap: $3.95B Avg. Daily Volume: 422,889 52 Week Range: $72.83 – $141.94

2. ASGN Incorporated (ASGN): $65.38

Shares of this professional staffing firm were acquired by 2 insiders:

  • Director Edwin A. Sheridan acquired 20,000 shares, paying $65.33 per share for a total amount of $1.3 million. Mr. Sheridan increased his stake by 1186.24% to 21,686 shares with this purchase.
  • SVP, Chief Legal Officer Jennifer Hankes Painter acquired 1,000 shares, paying $65.87 per share for a total amount of $65,872. Ms. Painter increased her stake by 6.66% to 16,019 shares with this purchase.

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

P/E: 20.96 Forward P/E: 14 Industry P/E: 25.54
P/S: 1.18 Price/Book: 3.2 EV/EBITDA: 14.22
Market Cap: $3.42B Avg. Daily Volume: 535,582 52 Week Range: $58.54 – $94.25

3. Independent Bank Group, Inc. (IBTX): $55.53

Shares of this regional  bank were acquired by 5 insiders:

  • Director Douglas A. Cifu acquired 10,000 shares, paying $54.79 per share for a total amount of $547,898. Mr. Cifu increased his stake by 31.62% to 41,621 shares with this purchase.
  • Director John Webb Jennings acquired 4,500 shares, paying $53.89 per share for a total amount of $242,491. Mr. Jennings increased his stake by 12.43% to 40,706 shares with this purchase.
  • Vice Chairman and CLO Brian E. Hobart acquired 3,700 shares, paying $54.19 per share for a total amount of $200,503. Mr. Hobart increased his stake by 3.16% to 120,624 shares with this purchase.
  • Director William E. Fair acquired 1,100 shares, paying $54.43 per share for a total amount of $59,873. These shares were purchased indirectly by Fair Title, Inc. dba Hatco Investments.
  • Vice Chairman and CRO Daniel W. Brooks acquired 1,000 shares, paying $55.71 per share for a total amount of $55,707. Mr. Brooks increased his stake by 0.92% to 110,008 shares with this purchase.

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

P/E: 15.55 Forward P/E: 10.36 Industry P/E: 17.3
P/S: 5.02 Price/Book: 1.1 EV/EBITDA: N/A
Market Cap: $1.69B Avg. Daily Volume: 218,085 52 Week Range: $52.71 – $79

4. Odonate Therapeutics, Inc. (ODT): $15.23

Shares of this biotech company were acquired by 4 insiders:

  • Chief Executive Officer Kevin C. Tang acquired 39,765 shares, paying $15.35 per share for a total amount of $610,301. These shares were purchased indirectly by Tang Capital Partners, LP.
  • Director Aaron I. Davis acquired 26,824 shares, paying $14.72 per share for a total amount of $394,753. These shares were purchased indirectly by Boxer Capital, LLC.

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

P/E: N/A Forward P/E: -4.49 Industry P/E: 29.75
P/S: N/A Price/Book: 2.38 EV/EBITDA: -3.79
Market Cap: $409.56M Avg. Daily Volume: 54,375 52 Week Range: $14.06 – $32

5. Hyster-Yale Materials Handling, Inc. (HY): $59.88

Chairman Alfred M. Rankin acquired 15,009 shares of this lift truck manufacturing company, paying $61.35 per share for a total amount of $920,784. These shares were purchased indirectly through various trusts.

You can view the list of recent insider transactions for Hyster-Yale Materials Handling, Inc. here.

P/E: 28.62 Forward P/E: 10.22 Industry P/E: 15.32
P/S: 0.33 Price/Book: 1.78 EV/EBITDA: 9.85
Market Cap: $991.36M Avg. Daily Volume: 41,929 52 Week Range: $56.4 – $93.9

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $106.96

Chief Executive Officer Satya Nadella sold 203,418 shares of Microsoft for $106.68, generating $21.69 million from the sale.

We don’t often see the CEO of Microsoft sell stock and this sale caught our eye. His prior sale was of 328,000 shares sold an at average price of $109.44 in August 2018 and before that he sold 143,000 shares in August 2016. This “old tech” giant, has seen its stock tripled in value over the last five  years compared to a gain of 83% for the Nasdaq. Despite the recent pullback, the stock is still up more than 24% year-to-date.

Trading at 15 times EBITDA and sporting operating margins of over 32% while growing revenue nearly 19%, the stock appears to be reasonably valued. Guidance for the second quarter pointed to continued double digit revenue growth and no significant pressure in margins. So one can only conclude that Mr. Nadella is just taking some money off the table after a tremendous run-up in the stock along with the rest of the market.

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

P/E: 50.22 Forward P/E: 21.26 Industry P/E: 33.99
P/S: 7.44 Price/Book: 9.93 EV/EBITDA: 17.41
Market Cap: $821.19B Avg. Daily Volume: 27,424,237 52 Week Range: $80.7 – $116.18

2. Garmin Ltd. (GRMN): $61.56

Executive Chairman Min H. Kao sold 322,186 shares of this GPS manufacturer for $62.34, generating $20.08 million from the sale. These shares were purchased indirectly by Mr. Kao’s children.

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

P/E: 19.42 Forward P/E: 18.16 Industry P/E: 25.42
P/S: 3.61 Price/Book: 3.09 EV/EBITDA: 13.33
Market Cap: $11.62B Avg. Daily Volume: 1,167,025 52 Week Range: $55.91 – $70.77

3. Twitter, Inc. (TWTR): $32.36

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 682,242 shares for $28.73, generating $19.6 million from the sale. These shares were sold indirectly by various trusts.
  • VP, Engineering Michael Montano sold 1,250 shares for $29.05, generating $36,312 from the sale.

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

P/E: 104.73 Forward P/E: 41.49 Industry P/E: 64.51
P/S: 9.06 Price/Book: 4.38 EV/EBITDA: 32.04
Market Cap: $24.43B Avg. Daily Volume: 26,252,670 52 Week Range: $17.03 – $47.79

4. Sarepta Therapeutics, Inc. (SRPT): $122.37

EVP, CFO & CBO Sandesh Mahatme sold 107,524 shares of this biotech company for $127.74, generating $13.74 million from the sale. 89,400 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 Sarepta Therapeutics, Inc. here.

P/E: N/A Forward P/E: -62.75 Industry P/E: 119.85
P/S: 33.69 Price/Book: 11.61 EV/EBITDA: -49.14
Market Cap: $8.13B Avg. Daily Volume: 1,095,881 52 Week Range: $46.07 – $176.5

5. Alphabet Inc. (GOOG): $1071.47

CEO, Google LLC Sundar Pichai sold 10,000 shares of Alphabet for $1113.91, generating $11.14 million from the sale.

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

P/E: 46.27 Forward P/E: 22.36 Industry P/E: 64.51
P/S: 6.04 Price/Book: 4.6 EV/EBITDA: 17.53
Market Cap: $747.94B Avg. Daily Volume: 1,562,095 52 Week Range: $980.64 – $1273.89

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 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

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