Insider Weekends: President of New Spinoff Purchases $4 Million Worth of Shares

Welcome to edition 459 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $27.16 million of stock compared to $79.08 million in the week prior. Selling also declined sharply with insiders selling $747.39 million of stock last week compared to $1.87 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 27.52. In other words, insiders sold almost 28 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 23.66.

Insider Sector Heat Map April 5, 2019

Insider Sector Heat Map April 5, 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. Cyclerion Therapeutics, Inc. (CYCN): $16.27

President Mark G. Currie acquired 270,107 shares of this biotech company, paying $14.81 per share for a total amount of $4 million. Mr. Currie increased his stake by 522.98% to 321,755 shares with this purchase.

Mr. Currie acquired shares the day after Cyclerion was spun out of Ironwood Pharmaceuticals. He received 51,648 shares of Cyclerion on account of the spinoff and then purchased an additional 270,107 shares. If you subscribe to Joel Greenblatt’s philosophy of paying attention to spinoffs and following the actions of insiders of the new spinoff, then this purchase appears to be bullish.

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

P/E: N/A Forward P/E: N/A Industry P/E: 96.9
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $444.24M Avg. Daily Volume: 351,700 52 Week Range: $13.9 – $21

2. Revlon, Inc. (REV): $21.24

Director Ronald O. Perelman acquired 180,000 shares of this beauty care products company, paying $20.54 per share for a total amount of $3.69 million. These shares were purchased indirectly by MacAndrews & Forbes Incorporated.

This is the third week in a row Revlon has made our list of notable insider purchases on account of Mr. Perelman’s purchases.

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

P/E: N/A Forward P/E: -11.01 Industry P/E: 69.56
P/S: 0.44 Price/Book: N/A EV/EBITDA: 46.03
Market Cap: $1.12B Avg. Daily Volume: 152,893 52 Week Range: $14 – $29.62

3. Walgreens Boots Alliance, Inc. (WBA): $54.69

Co-Chief Operating Officer Ornella Barra acquired 18,000 shares of this pharmacy-led health and wellbeing company, paying $54.56 per share for a total amount of $982,080. These shares were purchased indirectly by OLB Holdings Ltd.

An earnings related miss caused Walgreens Boots Alliance to drop to levels not seen in over 5 years and I would expect both Ms. Barra and her partner Mr. Pessina to continue buying shares based on their past purchases of Walgreens.

You can view the list of recent insider transactions for Walgreens Boots Alliance, Inc. here.

P/E: 10.06 Forward P/E: 8.08 Industry P/E: 18.14
P/S: 0.37 Price/Book: 2.01 EV/EBITDA: 8.54
Market Cap: $50B Avg. Daily Volume: 6,654,780 52 Week Range: $53.85 – $86.31

4. Hyster-Yale Materials Handling, Inc. (HY): $68.04

Chairman Alfred M. Rankin acquired 13,198 shares of this truck manufacturing company, paying $63.51 per share for a total amount of $838,212. These shares were purchased indirectly by various trusts and entities.

You can view the list of recent insider transactions for Hyster-Yale Materials Handling, Inc. here.

P/E: 32.56 Forward P/E: 11.03 Industry P/E: 13.03
P/S: 0.36 Price/Book: 2.14 EV/EBITDA: 16.68
Market Cap: $1.13B Avg. Daily Volume: 51,064 52 Week Range: $55.88 – $78.19

5. Costco Wholesale Corporation (COST): $245.87

Director John W. Meisenbach acquired 3,000 shares of this warehouse retailer, paying $242.65 per share for a total amount of $727,935. Mr. Meisenbach increased his stake by 30.51% to 12,833 shares with this purchase.

You can view the list of recent insider transactions for Costco Wholesale Corporation here.

P/E: 31.57 Forward P/E: 28.89 Industry P/E: 25.78
P/S: 0.73 Price/Book: 7.81 EV/EBITDA: 17.66
Market Cap: $108.15B Avg. Daily Volume: 2,144,546 52 Week Range: $182.17 – $247.09

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $175.72

Shares of Facebook were sold by 5 insiders:

  • COB and CEO Mark Zuckerberg sold 347,270 shares for $176.18, generating $61.18 million from the sale. These shares were sold indirectly by various entities.
  • Chief Product Officer Christopher K. Cox sold 63,600 shares for $174.42, generating $11.09 million from the sale.
  • Chief Operating Officer Sheryl Sandberg sold 55,000 shares for $176.70, generating $9.72 million from the sale. These shares were sold indirectly by a trust.
  • VP Bus. & Marketing Partnerships David B. Fischer sold 10,000 shares for $175.00, generating $1.75 million from the sale.
  • VP and General Counsel Colin Stretch sold 750 shares for $174.50, generating $130,875 from the sale.

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

P/E: 23.21 Forward P/E: 19.81 Industry P/E: 41.78
P/S: 8.98 Price/Book: 5.96 EV/EBITDA: 15.77
Market Cap: $501.5B Avg. Daily Volume: 19,641,917 52 Week Range: $123.02 – $218.62

2. CarGurus, Inc. (CARG): $41.45

Shares of this online auto shopping provider were sold by 3 insiders:

  • Director Anastasios Parafestas sold 249,589 shares for $40.31, generating $10.06 million from the sale. These shares were sold indirectly by various trusts and entities.
  • CEO and Chairman Langley Steinert sold 234,812 shares for $40.62, generating $9.54 million from the sale. 2,252 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Product Officer Thomas Michael Caputo sold 617 shares for $40.00, generating $24,680 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 CarGurus, Inc. here.

P/E: 72.72 Forward P/E: 74.02 Industry P/E: 41.78
P/S: 10.13 Price/Book: 23.58 EV/EBITDA: 157.14
Market Cap: $4.6B Avg. Daily Volume: 695,848 52 Week Range: $29.185 – $57.25

3. Palo Alto Networks, Inc. (PANW): $238.85

Shares of this computer security company were sold by 2 insiders:

  • Director Mark D. McLaughlin sold 40,000 shares for $241.63, generating $9.67 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, Chief Technology Officer Nir Zuk sold 30,000 shares for $241.67, generating $7.25 million from the sale.

You can view the list of recent insider transactions for Palo Alto Networks, Inc. here.

P/E: N/A Forward P/E: 37.15 Industry P/E: 38.02
P/S: 8.69 Price/Book: 20.88 EV/EBITDA: 252.26
Market Cap: $22.52B Avg. Daily Volume: 1,367,379 52 Week Range: $160.08 – $260.63

4. The Southern Company (SO): $51.65

President & CEO, GPC William P. Bowers sold 233,477 shares of this electric utilities company for $51.29, generating $11.98 million from the sale.

You can view the list of recent insider transactions for The Southern Company here.

P/E: 23.8 Forward P/E: 16.5 Industry P/E: 14.08
P/S: 2.27 Price/Book: 2.16 EV/EBITDA: 13.65
Market Cap: $53.44B Avg. Daily Volume: 4,989,056 52 Week Range: $42.42 – $52.65

5. GoPro, Inc. (GPRO): $6.68

CEO, Chairman of the Board Nicholas Woodman sold 1,400,000 shares of this consumer electronics company for $6.52, generating $9.13 million from the sale. These shares were sold indirectly by a trust.

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

P/E: N/A Forward P/E: 21.55 Industry P/E: 10.67
P/S: 0.82 Price/Book: 4.44 EV/EBITDA: -22.18
Market Cap: $942.33M Avg. Daily Volume: 3,782,395 52 Week Range: $4 – $7.6

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 GoPro (GPRO). 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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