Insider Weekends: Director of Activision Blizzard Purchases $4.3 Million Worth of Stock

Welcome to edition 456 of Insider Weekends. Insider buying decreased significantly again last week with insiders purchasing $80.53 million of stock compared to $158.33 million in the week prior. Selling also decreased with insiders selling $2.37 billion of stock last week compared to $3.8 billion in the week prior. As we approach the end of the quarter we are likely to see less insider activity as companies enter their “quiet period” before earnings.

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 29.38. In other words, insiders sold more than 29 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 24.02.

Insider Sector Heat Map March 15, 2019

Insider Sector Heat Map March 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): $19.87

Shares of this oil & gas pipelines company were acquired by 2 insiders:

  • Executive Chairman Richard D. Kinder acquired 300,000 shares, paying $19.66 per share for a total amount of $5.89 million. Mr. Kinder increased his stake by 0.13% to 238,500,393 shares with this purchase.
  • Director Deborah MacDonald acquired 2,500 shares, paying $19.89 per share for a total amount of $49,737. Ms. MacDonald increased her stake by 10.95% to 25,328 shares with this purchase.

It is good to see one other insider join Mr. Kinder in his recent string of insider purchases, albeit with a small purchase. This is Ms. MacDonald’s first open market insider purchase. She has served as a director of Kinder Morgan since 2011 and held various management positions at the company since 1999.

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

P/E: 29.88 Forward P/E: 18.23 Industry P/E: 588.9
P/S: 3.18 Price/Book: 1.33 EV/EBITDA: 12.85
Market Cap: $44.98B Avg. Daily Volume: 16,780,368 52 Week Range: $14.62 – $20.09

2. Enstar Group Limited (ESGR): $173.63

Shares of this insurance company were acquired by 3 insiders:

  • Chief Executive Officer Michael Dominic Francis Silvester acquired 27,775 shares, paying $169.88 per share for a total amount of $4,718,545. These shares were purchased indirectly by Rock Pigeon Limited.
  • Chief Operating Officer Orla Gregory acquired 5,820 shares, paying $171.25 per share for a total amount of $996,675. Mr. Gregory increased his stake by 38.68% to 20,866 shares with this purchase.
  • Chief Financial Officer Guy Thomas Bowker acquired 1,500 shares, paying $160.52 per share for a total amount of $240,780. Mr. Bowker increased his stake by 49.65% to 4,521 shares with this purchase.

You can view the list of recent insider transactions for Enstar Group Limited here.

P/E: N/A Forward P/E: 10.21 Industry P/E: 117.67
P/S: 4.44 Price/Book: 0.98 EV/EBITDA: 17.41
Market Cap: $3.73B Avg. Daily Volume: 44,500 52 Week Range: $150.32 – $223.45

3. Activision Blizzard, Inc. (ATVI): $44.63

Director Peter J. Nolan acquired 100,000 shares of this video game software company, paying $42.95 per share for a total amount of $4.29 million.

After a great run for video game stocks over the last five years, the traditional gaming companies like Activision Blizzard, EA and Take-Two have been weak over the last six months, with Activision suffering the most as you can see from the chart below. With the free to play game Fortnite capturing the attention of gamers, several mainstay titles by the traditional gaming companies like Call of Duty did not do as well as expected. EA’s recently released Apex Legends put a floor on that stock thanks to the game quickly garnering 50 million players within 30 days of its release.

With Activision Blizzard trading at 13 times EBITDA, $1.7 billion in net cash on the balance sheet and high double digit net margins, I can see why this director seems bullish. He is the only insider that has purchased Activision Blizzard stock since we started tracking insider data in 2010. In this changing landscape for gaming with free to play games dominating, it might be a good idea to stay cautious and see how things play out over the next few months. I am not as bullish on Activision as I was nearly a decade ago but it remains high on my watch list.

ATVI EA and TTWO 6 Months Chart

ATVI EA and TTWO 6 Months Chart

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

P/E: 18.99 Forward P/E: 17.3 Industry P/E: 35.95
P/S: 4.55 Price/Book: 3 EV/EBITDA: 12.92
Market Cap: $34.09B Avg. Daily Volume: 13,163,068 52 Week Range: $39.85 – $84.68

4. Arconic Inc. (ARNC): $18.99

Chairman and CEO John C. Plant acquired 105,000 shares of this lightweight metals company, paying $18.67 per share for a total amount of $1.96 million. These shares were purchased indirectly through a trust.

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

P/E: 14.68 Forward P/E: 9.99 Industry P/E: 18.57
P/S: 0.66 Price/Book: 1.66 EV/EBITDA: 7.41
Market Cap: $9.21B Avg. Daily Volume: 6,105,098 52 Week Range: $15.63 – $24.55

5. CVS Health Corporation (CVS): $55.6

Shares of CVS were acquired by 4 insiders:

  • Director David C. Brown II acquired 10,000 shares, paying $53.18 per share for a total amount of $531,800. Mr. Brown increased his stake by 9.88% to 111,252 shares with this purchase.
  • Director David W. Dorman acquired 9,600 shares, paying $52.71 per share for a total amount of $506,016. Mr. Dorman increased his stake by 8.52% to 122,302 shares with this purchase.
  • Director Edward J. Ludwig acquired 2,000 shares, paying $52.80 per share for a total amount of $105,600. Mr. Ludwig increased his stake by 37.19% to 7,378 shares with this purchase.
  • Director Fernando Aguirre acquired 1,900 shares, paying $53.59 per share for a total amount of $101,821. Mr. Aguirre increased his stake by 13.27% to 16,222 shares with this purchase.

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

P/E: N/A Forward P/E: 7.53 Industry P/E: 28.06
P/S: 0.37 Price/Book: 1.24 EV/EBITDA: 11.22
Market Cap: $72.12B Avg. Daily Volume: 13,039,081 52 Week Range: $51.93 – $82.15

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

Notable Insider Sales:

1. Inspire Medical Systems, Inc. (INSP): $57.19

Director Chau Quang Khuong sold 358,449 shares of this medical devices company for $57.23, generating $20.51 million from the sale. These shares were sold indirectly by OrbiMed Private Investments.

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

P/E: N/A Forward P/E: -44.68 Industry P/E: 36.12
P/S: 26.49 Price/Book: 8.16 EV/EBITDA: -58.9
Market Cap: $1.34B Avg. Daily Volume: 361,906 52 Week Range: $22.5 – $64.34

2. AvalonBay Communities, Inc. (AVB): $198.97

Shares of this apartment REIT were sold by 4 insiders:

  • Chairman & CEO Timothy J. Naughton sold 67,789 shares for $196.41, generating $13.31 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President Stephen W. Wilson sold 4,956 shares for $195.96, generating $971,178 from the sale.
  • EVP-General Counsel Edward M. Schulman sold 4,092 shares for $198.94, generating $814,075 from the sale. 1,992 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President William M. McLaughlin sold 2,500 shares for $199.76, generating $499,410 from the sale.

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

P/E: 28.23 Forward P/E: 39.32 Industry P/E: 41.58
P/S: 12.01 Price/Book: 2.59 EV/EBITDA: 23.56
Market Cap: $27.49B Avg. Daily Volume: 623,285 52 Week Range: $156.4 – $200.4

3. Tandem Diabetes Care, Inc. (TNDM): $73.15

Shares of this medical devices company were sold by 3 insiders:

  • Executive Chairman Kim D. Blickenstaff sold 200,000 shares for $64.95, generating $12.99 million from the sale.
  • Director Dick Allen sold 17,539 shares for $62.58, generating $1.09 million from the sale.
  • EVP & Chief Commercial Officer Brian B. Hansen sold 10,000 shares for $72.00, generating $720,000 from the sale.

You can view the list of recent insider transactions for Tandem Diabetes Care, Inc. here.

P/E: N/A Forward P/E: -187.56 Industry P/E: 36.12
P/S: 22.96 Price/Book: 32.07 EV/EBITDA: -105.46
Market Cap: $4.22B Avg. Daily Volume: 1,984,922 52 Week Range: $3.651 – $74.75

4. American Homes 4 Rent (AMH): $22.76

Shares of this real estate investment trust were sold by 2 insiders:

  • Chief Operating Officer Jack E. Corrigan sold 615,000 shares for $22.63, generating $13.91 million from the sale. These shares were sold indirectly by an LLC formed for the benefit of the reporting person and his family.
  • Executive Vice President Bryan Smith sold 4,544 shares for $22.62, generating $102,793 from the sale.

You can view the list of recent insider transactions for American Homes 4 Rent here.

P/E: 284.5 Forward P/E: 91.04 Industry P/E: 41.58
P/S: 7.47 Price/Book: 1.29 EV/EBITDA: 19.24
Market Cap: $8.01B Avg. Daily Volume: 2,149,806 52 Week Range: $18.91 – $23.34

5. Installed Building Products, Inc. (IBP): $44.34

Shares of this building materials company were sold by 2 insiders:

  • President, CEO and Chairman Jeffrey W. Edwards sold 300,000 shares for $44.94, generating $13.48 million from the sale. These shares were sold indirectly by  Installed Building Systems, Inc.
  • Chief Operating Officer Jay P. Elliott sold 3,500 shares for $44.51, generating $155,789 from the sale.

You can view the list of recent insider transactions for Installed Building Products, Inc. here.

P/E: 25.34 Forward P/E: 13 Industry P/E: 17.98
P/S: 0.99 Price/Book: 7.23 EV/EBITDA: 10.83
Market Cap: $1.32B Avg. Daily Volume: 200,311 52 Week Range: $29.24 – $65.85

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: 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.

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