Welcome to edition 440 of Insider Weekends. Insider buying decreased last week with insiders purchasing $130.03 million of stock compared to $178.94 million in the week prior. Selling also decreased with insiders selling $1.14 billion of stock last week compared to $1.18 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 went up to 8.78. In other words, insiders sold almost 9 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 6.58.
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. Zillow Group, Inc. (Z): $29.39
Shares of this real estate information provider were acquired by 2 insiders:
- Director Jay C. Hoag acquired 850,000 shares, paying $29.18 per share for a total amount of $24.8 million. These shares were purchased indirectly by Mariner Investor II, L.P.
- Executive Chairman Richard N. Barton acquired 703,497 shares, paying $27.50 per share for a total amount of $19.43 million.
Zillow has had a wild ride in 2018 with the stock trading all the way up to $65.70 by mid-June before losing more than half its value through last week. The selling accelerated last week after the company reported a 21.7% increase in third quarter revenue to $343.09 million, which missed estimates by a sliver and more importantly guided Q4 revenue below expectations. Investors were also unhappy that Zillow has gotten into the business of buying and selling homes, which unlike Redfin’s business model, requires Zillow to hold homes in inventory. Some investors referred to this new line of business as a “flipping business” and it comes at a times when the housing market is cooling.
Does this sharp decline in Zillow present a buying opportunity? Jay Hoag and the co-founder of Zillow Rich Barton certainly seem to think so. When Jay Hoag purchases shares of a company, I pay attention, as the timing of his purchases have been spot on in the past. I mentioned both Jay Hoag and Rich Barton briefly last summer when I wrote,
I was hiking through the Purisima Creek Redwoods Preserve this weekend while listening to a Masters in Business podcast where Barry Ritholtz interviews Rich Barton, the cofounder of Expedia (EXPE), Zillow (Z) and Glassdoor. The interview was as absorbing as the ones I mentioned last week and it was interesting to hear Mr. Barton bring up Jay Hoag, the founding general partner at venture capital firm TCV. Mr. Hoag’s track record of purchasing Netflix (NFLX) and Zillow (Z) in the public market has been excellent. You can read more about his purchases of both these companies in the February 26, 2016 edition of Insider Weekends.
You can view the list of recent insider transactions for Zillow Group, Inc. here.
|P/E: N/A||Forward P/E: 75.36||Industry P/E: 25.81|
|P/S: 4.77||Price/Book: 1.80||EV/EBITDA: 47.45|
|Market Cap: $5.97B||Avg. Daily Volume: 2,856,203||52 Week Range: $26.38 – $65.70|
2. Energy Transfer LP (ET): $14.23
CEO Kelcy L. Warren acquired 1 million shares of this energy storage and transportation company, paying $14.93 per share for a total amount of $14.93 million. Mr. Warren increased his stake by 2.53% to 40,542,084 shares with this purchase.
This is the third week in a row we have written about insider purchases at Energy Transfer LP.
You can view the list of recent insider transactions for Energy Transfer LP here.
|P/E: 12.84||Forward P/E: 8.95||Industry P/E: 63.24|
|P/S: 0.72||Price/Book: N/A||EV/EBITDA: 14.58|
|Market Cap: $37.24B||Avg. Daily Volume: 8,655,485||52 Week Range: $12.8 – $19.34|
3. Jazz Pharmaceuticals plc (JAZZ): $150.09
Director Seamus Mulligan acquired 50,000 shares of this biotech company, paying $144.56 per share for a total amount of $7.23 million. Mr. Mulligan increased his stake by 4.76% to 1,100,868 shares with this purchase.
You can view the list of recent insider transactions for Jazz Pharmaceuticals plc here.
|P/E: 17.73||Forward P/E: 10.58||Industry P/E: 31.23|
|P/S: 4.89||Price/Book: 2.99||EV/EBITDA: 10.31|
|Market Cap: $9.05B||Avg. Daily Volume: 560,444||52 Week Range: $130.15 – $184|
4. American Homes 4 Rent (AMH): $19.84
Shares of this real estate investment trust were acquired by 2 insiders:
- Director Tamara Hughes Gustavson acquired 144,138 shares, paying $19.71 per share for a total amount of $2.84 million. Ms. Gustavson increased her stake by 0.83% to 17,603,978 shares with this purchase.
- Director B. Wayne Hughes acquired 144,137 shares, paying $19.71 per share for a total amount of $2.84 million. These shares were purchased indirectly through a trust.
You can view the list of recent insider transactions for American Homes 4 Rent here.
|P/E: N/A||Forward P/E: 90.18||Industry P/E: 28.45|
|P/S: 6.68||Price/Book: 1.12||EV/EBITDA: 17.7|
|Market Cap: $6.98B||Avg. Daily Volume: 2,347,587||52 Week Range: $18.39 – $23.34|
5. Trinity Industries, Inc. (TRN): $22.26
Director Brandon B. Boze acquired 152,364 shares of this industrial products company, paying $21.99 per share for a total amount of $3.35 million. These shares were purchased indirectly by ValueAct Capital Master Fund, L.P.
We don’t normally highlight purchases by funds but decided to make an exception in this case because San Francisco based activist value-oriented fund ValueAct Capital is buying shares.
You can view the list of recent insider transactions for Trinity Industries, Inc. here.
|P/E: 5.09||Forward P/E: 17.67||Industry P/E: 16.66|
|P/S: 0.9||Price/Book: 0.76||EV/EBITDA: 9.32|
|Market Cap: $3.26B||Avg. Daily Volume: 2,270,669||52 Week Range: $19.3665 – $28.3297|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Walmart Inc. (WMT): $95.1
Shares of Walmart were sold by 2 insiders:
- Director Robson S. Walton sold 3,543,644 shares for $96.22, generating $340.98 million from the sale. These shares were sold indirectly by a trust.
- Executive Vice President Jacqueline P. Canney sold 4,026 shares for $97.95, generating $394,347 from the sale.
You can view the list of recent insider transactions for Walmart Inc. here.
|P/E: 54.31||Forward P/E: 20.19||Industry P/E: 60.34|
|P/S: 0.54||Price/Book: 3.86||EV/EBITDA: 10.51|
|Market Cap: $278.52B||Avg. Daily Volume: 8,377,565||52 Week Range: $81.78 – $109.98|
2. Hasbro, Inc. (HAS): $96.03
Director Alan G. Hassenfeld sold 405,350 shares of this toy company for $97.41, generating $39.48 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Hasbro, Inc. here.
|P/E: 59.06||Forward P/E: 19.17||Industry P/E: 33.79|
|P/S: 2.54||Price/Book: 6.45||EV/EBITDA: 16.95|
|Market Cap: $12.15B||Avg. Daily Volume: 1,182,716||52 Week Range: $79 – $109.6|
3. Novanta Inc. (NOVT): $65.91
Director Stephen W. Bershad sold 500,000 shares of this laser based solutions company for $68.15, generating $34.08 million from the sale.
You can view the list of recent insider transactions for Novanta Inc. here.
|P/E: 59.27||Forward P/E: 28.78||Industry P/E: 22.95|
|P/S: 3.8||Price/Book: 6.4||EV/EBITDA: 23.04|
|Market Cap: $2.3B||Avg. Daily Volume: 220,378||52 Week Range: $43.65 – $78.85|
4. Alphabet Inc. (GOOG): $1023.88
Shares of Alphabet were sold by 2 insiders:
- Director John L. Doerr sold 11,908 shares for $1049.76, generating $12.5 million from the sale. These shares were sold indirectly by a trust.
- CEO, Google LLC Sundar Pichai sold 10,000 shares for $1038.35, generating $10.38 million from the sale.
You can view the list of recent insider transactions for Alphabet Inc. here.
|P/E: 38.42||Forward P/E: 21.78||Industry P/E: 24.75|
|P/S: 5.5||Price/Book: 4.2||EV/EBITDA: 16.16|
|Market Cap: $714.03B||Avg. Daily Volume: 1,757,353||52 Week Range: $980.64 – $1273.89|
5. Vector Group Ltd. (VGR): $13.56
Shares of this tobacco company were sold by 2 insiders:
- 10% Owner Phillip Frost M.D. sold 145,609 shares for $14.19, generating $2.07 million from the sale. These shares were sold indirectly by a trust.
- Director Bennett S. Lebow sold 400,000 shares for $13.83, generating $5.53 million from the sale. These shares were sold indirectly by LeBow Gamma Limited Partnership.
You can view the list of recent insider transactions for Vector Group Ltd. here.
|P/E: 25.98||Forward P/E: 19.94||Industry P/E: 30.08|
|P/S: 1.37||Price/Book: N/A||EV/EBITDA: 11.23|
|Market Cap: $1.91B||Avg. Daily Volume: 1,619,033||52 Week Range: $12.56 – $22.0381|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold positions in AMH and 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.