Insider Weekends: Insider Buying Continues at Mohawk

Welcome to edition 443 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $205.39 million million of stock compared to $62.43 million in the week prior. Nearly a third of the buying last week was related to the IPO of biotech company Synthorx (THOR) but insiders of other companies also stepped up their buying ahead of the end of quarter quiet period. Selling on the other hand decreased with insiders selling $809.7 million of stock last week compared to $1.06 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 3.94. In other words, insiders sold almost 4 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 16.96.

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. Mohawk Industries, Inc. (MHK): $116.98

Shares of this home flooring products company were acquired by 2 insiders:

  • Director Filip Balcaen acquired 118,846 shares, paying $119.17 per share for a total amount of $14.16 million. These shares were purchased indirectly by Floorenter NV.
  • Director Bruce Bruckmann acquired 500 shares, paying $119.00 per share for a total amount of $59,500. Mr. Bruckmann increased his stake by 0.18% to 283,948 shares with this purchase.

These purchases follow a $10.99 million purchase by Mr. Balcaen we wrote about last week. With the pull back in the stock last week, Mohawk is down more than 57% this year compared to a 3.35% drop in the S&P 500. While revenue continued to grow in 2018, the rate of growth declined and earnings declined as well due to higher input costs.

Mohawk Revenue and Income Growth

Mohawk Revenue and Income Growth (source: Mohawk 2017 Annual Report)

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

P/E: 2.34 Forward P/E: 9.87 Industry P/E: 23.8
P/S: 0.88 Price/Book: 1.15 EV/EBITDA: 6.54
Market Cap: $8.68B Avg. Daily Volume: 1,349,493 52 Week Range: $113.45 – $282.21

2. Newmark Group, Inc. (NMRK): $9.07

Shares of this real estate services company were acquired by 2 insiders:

  • Chief Executive Officer Barry M. Gosin acquired 993,792 shares, paying $9.05 per share for a total amount of $8.99 million. Mr. Gosin increased his stake by 81.75% to 2,209,378 shares with this purchase.
  • Director Virginia S. Bauer acquired 10,000 shares, paying $8.38 per share for a total amount of $83,800. Mr. Bauer increased his stake by 106.01% to 19,433 shares with this purchase.

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

P/E: 45.12 Forward P/E: 5.56 Industry P/E: 19.74
P/S: 1.3 Price/Book: 4.2 EV/EBITDA: 16.23
Market Cap: $2.44B Avg. Daily Volume: 1,167,601 52 Week Range: $8.01 – $16.98

3. Live Oak Bancshares, Inc. (LOB): $14.84

Shares of this bank holding company were acquired by 9 insiders:

  • Chief Executive Officer James S. Mahan acquired 334,454 shares, paying $16.08 per share for a total amount of $5.38 million. These shares were purchased indirectly through a trust.
  • President, Live Oak Bank Huntley Garriott acquired 35,000 shares, paying $14.73 per share for a total amount of $515,448. Mr. Garriott increased his stake by inf% to 35,000 shares with this purchase.
  • Vice Chairman & EVP William L. Williams acquired 20,000 shares, paying $14.86 per share for a total amount of $297,147. Mr. Williams increased his stake by 71.17% to 48,100 shares with this purchase.
  • President Neil Lawrence Underwood acquired 15,546 shares, paying $16.08 per share for a total amount of $249,980. Mr. Underwood increased his stake by 1.26% to 1,248,269 shares with this purchase.
  • Director Glen F. Hoffsis acquired 4,000 shares, paying $15.30 per share for a total amount of $61,198. Mr. Hoffsis increased his stake by 4.54% to 92,192 shares with this purchase.
  • Director Miltom Emmett Petty acquired 3,000 shares, paying $13.64 per share for a total amount of $40,913. Mr. Petty increased his stake by 3.47% to 89,512 shares with this purchase.
  • Director William Henderson Cameron acquired 2,800 shares, paying $14.46 per share for a total amount of $40,483.
  • Director H K. Landis acquired 2,000 shares, paying $14.13 per share for a total amount of $28,265. Mr. Landis increased his stake by 1.03% to 195,310 shares with this purchase.
  • General Counsel Gregory W. Seward acquired 2,000 shares, paying $15.56 per share for a total amount of $31,120. Mr. Seward increased his stake by 20.00% to 12,000 shares with this purchase.

You can view the list of recent insider transactions for Live Oak Bancshares, Inc. here.

P/E: 5.48 Forward P/E: 43.65 Industry P/E: 18.6
P/S: 2.92 Price/Book: 1.25 EV/EBITDA: N/A
Market Cap: $595.78M Avg. Daily Volume: 274,301 52 Week Range: $13.46 – $32.95

4. Entercom Communications Corp. (ETM): $6.38

Chairman Emeritus Joseph M. Field acquired 600,000 shares of this radio broadcasting company, paying $6.52 per share for a total amount of $3.91 million. These shares were purchased indirectly by Mr. Field’s spouse and trust.

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

P/E: 3.18 Forward P/E: 6.44 Industry P/E: 24.29
P/S: 0.7 Price/Book: 0.52 EV/EBITDA: 11.64
Market Cap: $909.31M Avg. Daily Volume: 1,276,331 52 Week Range: $5.82 – $11.7

5. Aramark (ARMK): $32.08

Shares of this food, facilities, and uniform services provider were acquired by 2 insiders:

  • Chairman, President and CEO Eric J. Foss acquired 92,564 shares, paying $32.46 per share for a total amount of $3 million. Mr. Foss increased his stake by 5.83% to 1,679,407 shares with this purchase.
  • Director Stephen I. Sadove acquired 6,000 shares, paying $32.72 per share for a total amount of $196,320. Mr. Sadove increased his stake by 19.16% to 37,314 shares with this purchase.

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

P/E: 14.32 Forward P/E: 11.93 Industry P/E: 58.76
P/S: 0.5 Price/Book: 2.61 EV/EBITDA: 10.67
Market Cap: $7.92B Avg. Daily Volume: 3,295,723 52 Week Range: $30.78 – $46.09

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

Notable Insider Sales:

1. Walmart Inc. (WMT): $91.85

Director Robson S. Walton sold 1,573,840 shares of Walmart for $93.81, generating $147.63 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 52.46 Forward P/E: 19.46 Industry P/E: 38.01
P/S: 0.52 Price/Book: 3.72 EV/EBITDA: 10.05
Market Cap: $266.85B Avg. Daily Volume: 8,618,746 52 Week Range: $81.78 – $109.98

2. Workday, Inc. (WDAY): $162.03

Shares of this software application company were sold by 2 insiders:

  • Director David A. Duffield sold 309,667 shares for $161.50, generating $50 million from the sale.
  • SVP, General Counsel & Secretary James P. Shaughnessy sold 4,800 shares for $160.66, generating $771,174 from the sale.

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

P/E: N/A Forward P/E: 100.64 Industry P/E: 39.5
P/S: 13.5 Price/Book: 19.27 EV/EBITDA: -160.04
Market Cap: $35.32B Avg. Daily Volume: 2,299,064 52 Week Range: $100.24 – $172.67

3. Twitter, Inc. (TWTR): $35.87

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 682,242 shares for $36.08, generating $24.62 million from the sale. These shares were sold indirectly through various trusts.
  • CFO Ned D. Segal sold 6,000 shares for $34.39, generating $206,356 from the sale.

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

P/E: 26.45 Forward P/E: 40.3 Industry P/E: 25.67
P/S: 9.5 Price/Book: 4.21 EV/EBITDA: 35.54
Market Cap: $27.22B Avg. Daily Volume: 26,252,670 52 Week Range: $22.04 – $47.79

4. Inspire Medical Systems, Inc. (INSP): $41.36

Shares of this medical company were sold by 4 insiders:

  • Director Chau Quang Khuong sold 614,772 shares for $37.60, generating $23.12 million from the sale. These shares were sold indirectly by by OrbiMed Private Investments.
  • Director Jerry C. Griffin sold 1,300 shares for $37.60, generating $48,880 from the sale.

You can view the list of recent insider transactions for Inspire Medical Systems, Inc. here.

P/E: N/A Forward P/E: -31.57 Industry P/E: 30.69
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $885.12M Avg. Daily Volume: 205,690 52 Week Range: $22.5 – $57.874

5. CarGurus, Inc. (CARG): $34.76

Shares of this online auto shopping company were sold by 4 insiders:

  • CEO, President and Chairman Langley Steinert sold 247,862 shares for $35.62, generating $8.83 million from the sale.
  • Chief Technology Officer Oliver Ian Chrzan sold 76,000 shares for $35.44, generating $2.69 million from the sale.
  • Chief Operating Officer Samuel Zales sold 15,000 shares for $35.03, generating $525,396 from the sale.
  • Sr. VP, GC and Secretary Kathleen Bender Patton sold 2,006 shares for $35.58, generating $71,382 from the sale.

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

P/E: 76.9 Forward P/E: 93.95 Industry P/E: 25.67
P/S: 9.14 Price/Book: 22.43 EV/EBITDA: 271.49
Market Cap: $3.83B Avg. Daily Volume: 1,015,549 52 Week Range: $28.52 – $57.25

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 positions in ETM, WDAY 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria

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