Insider Weekends: A Week of Repeats with Purchases at both Kinder Morgan and Post

Welcome to edition 452 of Insider Weekends. Insider buying decreased last week with insiders purchasing $60.85 million of stock compared to $79.47 million in the week prior. Selling also decreased with insiders selling $1.29 billion of stock last week compared to $1.51 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 21.33. In other words, insiders sold more than 21 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 19.02. 

Insider Sector Heat Map February 15, 2019

Insider Sector Heat Map February 15, 2019 (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. Kinder Morgan, Inc. (KMI): $18.8

Executive Chairman Richard D. Kinder acquired 314,932 shares of this oil & gas pipelines company, paying $18.19 per share for a total amount of $5.73 million. Mr. Kinder increased his stake by 0.13% to 236,492,545 shares with this purchase.

We wrote the following about Mr. Kinder’s purchases of Kinder Morgan last week,

We reported on $3.87 million of purchases by Mr. Kinder in the week prior and he more than tripled his buying last week. With the stock rebounding strongly off the Christmas Eve lows and trading close to a 52 week high, it is interesting to see Mr. Kinder continue to purchase shares.

Kinder Morgan was one of the first companies in the energy industry to favor the Master Limited Partnership (MLP) structure that allowed companies to pay no corporate taxes and pass all its profits to investors as distributions. More than four years ago, it was also one of the first to abandon the structure by merging its four pipeline companies into a single one and adopting a traditional C corporate structure. With changes in the tax structure in 2018 pushing the corporate tax rate well below the top individual tax rate, the MLP structure was no longer as tax efficient as it once was and we have seen a number of MLP companies converting to C corporations in 2018.

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

P/E: 28.27 Forward P/E: 17.25 Industry P/E: 2
P/S: 3.01 Price/Book: 1.26 EV/EBITDA: 12.46
Market Cap: $42.56B Avg. Daily Volume: 16,284,049 52 Week Range: $14.62 – $18.98

2. Post Holdings, Inc. (POST): $102.9

Director William P. Stiritz acquired 35,755 shares of this packaged foods company, paying $97.75 per share for a total amount of $3.49 million. Mr. Stiritz increased his stake by 1.34% to 2,695,617 shares with this purchase.

It feels like a week of repeats with both Kinder Morgan and Post making it to the top of our list two weeks in a row. We wrote the following about Post last week,

Post Holdings was spun out of Ralcorp Holdings in February 2012 and has managed to buck the downward trend that most consumer packaged goods (CPG) companies like Kellogg have experienced over the last five years. As you can see from the chart below, Post has not only outperformed the S&P 500, it has significantly outperformed other CPG companies. Some of Post’s growth was driven by a private label business and some through strategic acquisitions. The company now has a vast array of products and brands ranging from cereals like Honey Bunch of Oats to protein drinks offered through its Premier Nutrition division.

Mr. Stiritz served as the Chairman and CEO of Post from its spinoff from Ralcorp in 2012 through 2014 and has since served as its Executive Chairman.

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

P/E: 26.02 Forward P/E: 17.29 Industry P/E: 22.86
P/S: 1.1 Price/Book: 2.18 EV/EBITDA: 11.19
Market Cap: $6.84B Avg. Daily Volume: 743,835 52 Week Range: $70.66 – $104.41

3. Plantronics, Inc. (PLT): $49.62

Director Brian S. Dexheimer acquired 25,000 shares of this communication equipment company, paying $46.21 per share for a total amount of $1.16 million. Mr. Dexheimer increased his stake by 86.39% to 53,937 shares with this purchase.

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

P/E: N/A Forward P/E: 7.72 Industry P/E: 17.34
P/S: 1.38 Price/Book: 2.62 EV/EBITDA: 24.1
Market Cap: $1.96B Avg. Daily Volume: 717,168 52 Week Range: $30.9 – $82.28

4. Corcept Therapeutics Incorporated (CORT): $11.8

Director Leonard G. Baker acquired 100,000 shares of this biotech company, paying $11.39 per share for a total amount of $1.14 million. Mr. Baker increased his stake by 3.32% to 3,114,793 shares with this purchase. 70,000 of these shares were purchased indirectly through a Limited Partnership.

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

P/E: 9.88 Forward P/E: 15.13 Industry P/E: 32.52
P/S: 5.73 Price/Book: 5.25 EV/EBITDA: 13.5
Market Cap: $1.36B Avg. Daily Volume: 1,896,529 52 Week Range: $9.14 – $20

5. Calix, Inc. (CALX): $8.20

Shares of this communication equipment company were purchased by 2 insiders:

  • Director Daniel J. Plants acquired 100,000 shares, paying $7.49 per share for a total amount of $749,000. These shares were purchased indirectly by Voce Capital Management LLC.
  • Chief Financial Officer Cory Sindelar acquired 10,000 shares, paying $7.53 per share for a total amount of $75,300.

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

P/E: N/A Forward P/E: 14.39 Industry P/E: 17.48
P/S: 0.99 Price/Book: 3.02 EV/EBITDA: -40.52
Market Cap: $435.668M Avg. Daily Volume: 483,543 52 Week Range: $6.00 – $11.30

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

Notable Insider Sales:

1. Vertex Pharmaceuticals Incorporated (VRTX): $188.07

Shares of this biotech company were sold by 6 insiders:

  • CEO & President Jeffrey M. Leiden sold 111,431 shares for $180.24, generating $20.08 million from the sale.
  • EVP, CRO Amit Sachdev sold 35,095 shares for $180.06, generating $6.32 million from the sale.
  • EVPChief Commercial Officer Stuart A. Arbuckle sold 33,073 shares for $180.21, generating $5.96 million from the sale.
  • EVP, Global Research and CSO David Altshuler sold 32,956 shares for $180.22, generating $5.94 million from the sale.
  • EVP, CL&AO Michael Parini sold 12,136 shares for $180.22, generating $2.19 million from the sale.
  • SVP & Interim CFO Paul M. Silva sold 4,215 shares for $180.16, generating $759,367 from the sale.

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

P/E: 23.25 Forward P/E: 29.11 Industry P/E: 69.44
P/S: 15.78 Price/Book: 10.82 EV/EBITDA: 61.79
Market Cap: $48.08B Avg. Daily Volume: 1,490,068 52 Week Range: $144.07 – $195.81

2. O’Reilly Automotive, Inc. (ORLY): $388

Shares of this auto parts retailer were sold by 4 insiders:

  • EV Chairman of the Board Gregory L. Henslee sold 50,000 shares for $374.37, generating $18.72 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chairman of the Board David E. O’Reilly sold 40,000 shares for $372.12, generating $14.88 million from the sale. 30,000  of these shares were sold indirectly through a trust.
  • COO & CO-President Jeff M. Shaw sold 3,615 shares for $375.35, generating $1.36 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Jay D. Burchfield sold 1,500 shares for $375.92, generating $563,880 from the sale.

You can view the list of recent insider transactions for O’Reilly Automotive, Inc. here.

P/E: 24.1 Forward P/E: 19.63 Industry P/E: 21.57
P/S: 3.22 Price/Book: 86.72 EV/EBITDA: 16.42
Market Cap: $30.67B Avg. Daily Volume: 731,565 52 Week Range: $217.64 – $388.51

3. Twitter, Inc. (TWTR): $31.23

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 682,242 shares for $30.29, generating $20.67 million from the sale. These shares were sold indrectly through various trusts.
  • CFO Ned D. Segal sold 6,000 shares for $30.38, generating $182,298 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 Twitter, Inc. here.

P/E: 20.02 Forward P/E: 30.62 Industry P/E: 41.41
P/S: 7.79 Price/Book: 3.49 EV/EBITDA: 23.17
Market Cap: $23.7B Avg. Daily Volume: 22,486,521 52 Week Range: $26.19 – $47.79

4. BlackRock, Inc. (BLK): $431.95

Shares of this asset management company were sold by 4 insiders:

  • Chairman and CEO Laurence Fink sold 44,000 shares for $412.75, generating $18.16 million from the sale.
  • Senior Managing Director Rachel Lord sold 3,863 shares for $426.70, generating $1.65 million from the sale.
  • Principal Accounting Officer Marc D. Comerchero sold 600 shares for $432.22, generating $259,330 from the sale.
  • Senior Managing Director Jeff A. Smith sold 225 shares for $431.01, generating $96,977 from the sale.

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

P/E: 16.25 Forward P/E: 14.95 Industry P/E: 241.01
P/S: 4.82 Price/Book: 2.13 EV/EBITDA: 11.27
Market Cap: $68.47B Avg. Daily Volume: 751,762 52 Week Range: $360.79 – $578.8

5. Paylocity Holding Corporation (PCTY): $84.36

Director Steven I. Sarowitz sold 222,500 shares of this software application company for $82.51, generating $18.36 million from the sale. 72,500 of these shares were sold indirectly by the Julian Grace Foundation.

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

P/E: 88.15 Forward P/E: 51.75 Industry P/E: 34.43
P/S: 10.69 Price/Book: 17.78 EV/EBITDA: 99.96
Market Cap: $4.46B Avg. Daily Volume: 249,090 52 Week Range: $43.72 – $88.47

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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