Welcome to edition 442 of Insider Weekends. Insider buying decreased last week with insiders purchasing $62.43 million million of stock compared to $90.28 million in the week prior. Selling also decreased with insiders selling $1.06 billion of stock last week compared to $1.46 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 16.96. In other words, insiders sold almost 17 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 16.17.
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): $120.44
Director Filip Balcaen acquired 88,200 shares of this home flooring products company, paying $124.70 per share for a total amount of $10.99 million. These shares were purchased indirectly by Floorenter NV.
Mr. Balcaen made a large $29.6 million purchase last month and we wrote the following about Mohawk then,
Mohawk is the world’s largest flooring manufacturer with sales in over 170 countries. Mohawk showed up on my radar earlier this year when I saw multiple purchases by Mr. Balcaen following a big drop in the stock price. His first set of purchases in May were at an average price of almost $210 and then he purchased again in July and August at prices in the low $180s.
A few weeks ago, I asked our analyst to write a report on Mohawk as I was thinking about featuring the stock for premium members. After reading her report I was convinced that the best course of action was to hold off on buying the company. I felt that the company was probably too optimistic in thinking that it could offset some of the headwinds it was facing by increasing prices. A weakening housing market in the US and competition would make price increases challenging to execute.
This was before the steep decline the stock saw late last month when the stock dropped from $151.07 to $115.03 in a single day after the company once again reported disappointing third quarter earnings, which declined 12.26% year-over-year. The insiders managed to buy the stock near five year lows before it rebounded more than 10% off those lows.
With the housing market continuing to weaken my opinion of Mohawk has not changed and I would like to see the decline in earning reverse before I consider starting a position. The downside to this wait-and-see approach is that when conditions change, we are likely to see a sharp rebound in the stock and end up missing the first 20% or 30% of the move up.
You can view the list of recent insider transactions for Mohawk Industries, Inc. here.
|P/E: 2.41||Forward P/E: 10.16||Industry P/E: 23.8|
|P/S: 0.9||Price/Book: 1.19||EV/EBITDA: 6.96|
|Market Cap: $8.94B||Avg. Daily Volume: 1,355,203||52 Week Range: $113.45 – $282.21|
2. Entercom Communications Corp. (ETM): $6.46
Chairman Emeritus Joseph M. Field acquired 500,000 shares of this radio broadcasting company, paying $6.54 per share for a total amount of $3.27 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: 3.22||Forward P/E: 6.53||Industry P/E: 16.03|
|P/S: 0.71||Price/Book: 0.53||EV/EBITDA: 11.71|
|Market Cap: $920.71M||Avg. Daily Volume: 1,245,150||52 Week Range: $5.82 – $11.7|
3. United Continental Holdings, Inc. (UAL): $88.23
Director Edward Shapiro acquired 30,000 shares of this airline, paying $92.57 per share for a total amount of $2.78 million. Mr. Shapiro increased his stake by 23.49% to 157,707 shares with this purchase.
You can view the list of recent insider transactions for United Continental Holdings, Inc. here.
|P/E: 11.13||Forward P/E: 8.62||Industry P/E: 13.56|
|P/S: 0.6||Price/Book: 2.54||EV/EBITDA: 6.46|
|Market Cap: $24.04B||Avg. Daily Volume: 3,138,741||52 Week Range: $60.44 – $97.85|
4. The J. M. Smucker Company (SJM): $98.17
Executive Chairman Richard K. Smucker acquired 20,000 shares of this packaged food products company, paying $103.09 per share for a total amount of $2.06 million. Mr. Smucker increased his stake by 3.02% to 681,387 shares with this purchase.
You can view the list of recent insider transactions for The J. M. Smucker Company here.
|P/E: 8.3||Forward P/E: 11.8||Industry P/E: 20.85|
|P/S: 1.49||Price/Book: 1.41||EV/EBITDA: 11.49|
|Market Cap: $11.17B||Avg. Daily Volume: 1,133,087||52 Week Range: $96.13 – $133.38|
5. Tile Shop Holdings, Inc. (TTS): $5.66
Shares of this home improvement stores company were acquired by 2 insiders:
- Director Peter H. Kamin acquired 132,993 shares, paying $5.90 per share for a total amount of $784,432. Mr. Kamin increased his stake by 22.70% to 718,913 shares with this purchase.
- Director Peter J. Jacullo acquired 70,000 shares, paying $5.92 per share for a total amount of $414,400.
You can view the list of recent insider transactions for Tile Shop Holdings, Inc. here.
|P/E: 70.75||Forward P/E: 20.21||Industry P/E: 24.34|
|P/S: 0.85||Price/Book: 2||EV/EBITDA: 7.67|
|Market Cap: $298.62M||Avg. Daily Volume: 503,779||52 Week Range: $5.15 – $10.5|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Walmart Inc. (WMT): $93.19
Director Robson S. Walton sold 1,109,156 shares of Walmart for $97.92, generating $108.61 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: 53.22||Forward P/E: 19.74||Industry P/E: 38.01|
|P/S: 0.53||Price/Book: 3.78||EV/EBITDA: 10.51|
|Market Cap: $270.74B||Avg. Daily Volume: 8,490,032||52 Week Range: $81.78 – $109.98|
2. Cerner Corporation (CERN): $53.73
Vice Chairman Clifford W. Illig sold 435,000 shares of this health information services company for $57.95, generating $25.21 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Cerner Corporation here.
|P/E: 21.54||Forward P/E: 19.97||Industry P/E: 195.05|
|P/S: 3.4||Price/Book: 3.49||EV/EBITDA: 14.89|
|Market Cap: $17.7B||Avg. Daily Volume: 1,930,439||52 Week Range: $50.91 – $73.43|
3. Athenex, Inc. (ATNX): $12.07
Director Song-yi Zhang sold 1,000,000 shares of this biotech company for $13.15, generating $13.15 million from the sale. These shares were sold indirectly by Mandra Medical Limited.
You can view the list of recent insider transactions for Athenex, Inc. here.
|P/E: N/A||Forward P/E: -6.94||Industry P/E: 95.96|
|P/S: 9.76||Price/Book: 4.97||EV/EBITDA: -5.77|
|Market Cap: $807.41M||Avg. Daily Volume: 290,550||52 Week Range: $9.83 – $20.9|
4. Euronet Worldwide, Inc. (EEFT): $111.34
Shares of this electronics payments provider were sold by 2 insiders:
- CEO, epay and APAC Division Kevin J. Caponecchi sold 50,922 shares for $119.53, generating $6.09 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- EVP – Chief Financial Officer Rick Weller sold 40,000 shares for $120.31, generating $4.81 million from the sale.
You can view the list of recent insider transactions for Euronet Worldwide, Inc. here.
|P/E: 40.22||Forward P/E: 16.23||Industry P/E: 27.74|
|P/S: 2.3||Price/Book: 4.86||EV/EBITDA: 12.55|
|Market Cap: $5.74B||Avg. Daily Volume: 594,200||52 Week Range: $70.67 – $121.93|
5. Alphabet Inc. (GOOG): $1036.58
Shares of Google were sold by 3 insiders:
- CEO, Google LLC Sundar Pichai sold 10,000 shares for $1041.75, generating $10.42 million from the sale.
- Director Ann Mather sold 194 shares for $1120.68, generating $217,412 from the sale.
- VP, Chief Accounting Officer Amie Thuener O’Toole sold 80 shares for $1103.12, generating $88,250 from the sale.
You can view the list of recent insider transactions for Alphabet Inc. here.
|P/E: 38.9||Forward P/E: 21.97||Industry P/E: 36.8|
|P/S: 5.57||Price/Book: 4.25||EV/EBITDA: 15.5|
|Market Cap: $723.62B||Avg. Daily Volume: 1,814,075||52 Week Range: $980.64 – $1273.89|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in 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.