Insider Weekends: Randal Kirk Purchases Over $8 Million of Intrexon

Welcome to edition 466 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $158.64 million of stock compared to $385.5 million in the week prior. Selling on the other hand almost doubled with insiders selling $2.03 billion of stock last week compared to $1.15 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 12.79. In other words, insiders sold almost 13 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 2.98.

Insider Sector Heat Map May 23, 2019

Insider Sector Heat Map May 23, 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. The Medicines Company (MDCO): $34.88

Director Alexander J. Denner acquired 431,000 shares of this drug manufacturer, paying $33.89 per share for a total amount of $14.61 million. These shares were purchased indirectly by Sarissa Capital Management LP.

Dr. Denner was also a buyer of Biogen (BIIB) earlier this month. We wrote the following about Dr. Denner in February,

Dr. Denner started Sarissa Capital Management in 2012 after working as a healthcare portfolio manager at Icahn Capital. As of its Q3 2018 13-F filing, the fund had a concentrated portfolio worth $453.36 million, with more than 36% of its assets in Biogen. The fund also held positions in Innoviva (INVA) and Allergan (AGN). Dr. Denner also serves as the Chairman of the Board at The Medicines Company (MDCO).

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

P/E: N/A Forward P/E: -11.55 Industry P/E: 29.3
P/S: -1578.46 Price/Book: N/A EV/EBITDA: -20.11
Market Cap: $2.58B Avg. Daily Volume: 1,077,369 52 Week Range: $16.69 – $41.57

2. Intrexon Corporation (XON): $4.69

Chief Executive Officer Randal J. Kirk acquired 1,739,471 shares of this biotech company, paying $4.67 per share for a total amount of $8.12 million. These shares were purchased indirectly through various entities.

One of the things I like about reviewing insider transactions every week is the opportunity to discover companies that would not have otherwise been on my radar. Intrexon and Randal Kirk are a good example where I came across the company and Mr. Kirk after his purchase of Ziopharm Onchology (ZIOP) back in November 2013. We wrote the following about Mr. Kirk back then,

We decided to highlight the purchase because of Randal Kirk’s long track record investing in the biotech sector. The Forbes article titled “The Next Big Move For The Smartest Biotech Investor”  provides an interesting overview of Mr. Kirk and his interest in Ziopharm.

Unfortunately the last few years have not been kind to Intrexon with the stock dropping nearly 78% while the Nasdaq went up 80% over the same period. The company has reported losses in each of the last four years and revenue declined last year to $160 million from $231 million in 2017. The company has a large pipeline of products in both healthcare to treat cancer as well as in bioengineering where the company builds technology for a wide range of applications including the prevention of browning in apples. You can explore their pipeline on DNA.com.

Intrexon DNA Applications

Intrexon DNA Applications (Click to enlarge. Source: Intrexon company website)

This could be another case of a billionaire spending a significant amount his wealth to get a healthcare company off the ground like Alfred Mann tried with MannKind (MNKD) before his death in 2016 or Phillip Frost is trying with Opko Health (OPK) or it could turn out to be something a whole lot more. An investment in Intrexon would require an understanding of the company’s pipeline, its technology and addressable markets.

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

P/E: N/A Forward P/E: -4.34 Industry P/E: 69.3
P/S: 5.24 Price/Book: 2.41 EV/EBITDA: -2.11
Market Cap: $756.37M Avg. Daily Volume: 2,984,441 52 Week Range: $3.95 – $19.94

3. Continental Resources, Inc. (CLR): $38.47

CEO & Chairman Harold Hamm acquired 93,000 shares of this oil & gas company, paying $42.71 per share for a total amount of $3.97 million. Mr. Hamm increased his stake by 2.74% to 3,483,027 shares with this purchase. 28,000 of these shares were purchased indirectly by Transwestern Transports.

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

P/E: 15.33 Forward P/E: 11.52 Industry P/E: 14.33
P/S: 3.29 Price/Book: 2.27 EV/EBITDA: 5.76
Market Cap: $14.35B Avg. Daily Volume: 2,268,676 52 Week Range: $35.54 – $71.95

4. ARMOUR Residential REIT, Inc. (ARR): $18.13

Co-CEO and President Jeffrey J. Zimmer acquired 80,000 shares of this residential REIT, paying $17.93 per share for a total amount of $1.43 million. These shares were purchased indirectly by ARMOUR Capital Management LP.

You can view the list of recent insider transactions for ARMOUR Residential REIT, Inc. here.

P/E: N/A Forward P/E: 7.34 Industry P/E: 41.07
P/S: -4.75 Price/Book: 0.85 EV/EBITDA: N/A
Market Cap: $1.08B Avg. Daily Volume: 880,579 52 Week Range: $17.81 – $24.07

5. Bunge Limited (BG): $50.55

Shares of this farm products company were acquired by 3 insiders:

  • Chief Executive Officer Gregory A. Heckman acquired 38,588 shares, paying $51.93 per share for a total amount of $2 million. Mr. Heckman increased his stake by 234.35% to 55,054 shares with this purchase.
  • President Global Risk Mgmnt Brian Zachman acquired 10,000 shares, paying $51.28 per share for a total amount of $512,777. Mr. Zachman increased his stake by 68.44% to 24,611 shares with this purchase.
  • Director Henry Ward Winship IV acquired 4,000 shares, paying $51.40 per share for a total amount of $205,600. Mr. Winship increased his stake by 191.75% to 6,086 shares with this purchase.

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

P/E: 23.96 Forward P/E: 13.1 Industry P/E: 22.33
P/S: 0.16 Price/Book: 1.32 EV/EBITDA: 9.97
Market Cap: $7.15B Avg. Daily Volume: 1,688,001 52 Week Range: $47.26 – $73.13

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

Notable Insider Sales:

1. Walmart Inc. (WMT): $102.67

Director Robson S. Walton sold 5,418,657 shares of Walmart for $101.43, generating $549.59 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: 35.92 Forward P/E: 20.53 Industry P/E: 45.92
P/S: 0.57 Price/Book: 4.32 EV/EBITDA: 11.1
Market Cap: $294.37B Avg. Daily Volume: 6,467,226 52 Week Range: $81.81 – $106.21

2. Everbridge, Inc. (EVBG): $79.99

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

  • CEO & Chairman Jaime Wallace Ellertson sold 277,000 shares for $81.45, generating $22.56 million from the sale.
  • SVP & General Counsel Elliot J. Mark sold 3,559 shares for $85.02, generating $302,584 from the sale.

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

P/E: N/A Forward P/E: -727.18 Industry P/E: 32.53
P/S: 16.52 Price/Book: 14.26 EV/EBITDA: -70.22
Market Cap: $2.63B Avg. Daily Volume: 471,180 52 Week Range: $41.94 – $85.14

3. First Citizens BancShares, Inc. (FCNCA): $437.34

Shares of this regional bank were sold by two insiders:

  • President Peter M. Bristow sold 10,000 shares for $448.00, generating $4.48 million from the sale. These shares were sold indirectly through a trust.
  • 10% Owner Claire H. Bristow sold 10,000 shares for $448.00, generating $4.48 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for First Citizens BancShares, Inc. here.

P/E: 12.56 Forward P/E: N/A Industry P/E: 18.97
P/S: 3.09 Price/Book: 1.41 EV/EBITDA: N/A
Market Cap: $4.92B Avg. Daily Volume: 40,468 52 Week Range: $355.18 – $488.44

4. salesforce.com, inc. (CRM): $154.51

Shares of this software application company were sold by 9 insiders:

  • Chairman of the Board & co-CEO Marc Benioff sold 25,000 shares for $155.41, generating $3.89 million from the sale.
  • President and CFO Mark J. Hawkins sold 16,375 shares for $157.05, generating $2.57 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • co-CEO Keith Block sold 3,553 shares for $155.77, generating $553,441 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President, Technology Srinivas Tallapragada sold 1,629 shares for $153.55, generating $250,128 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Pres. & Chief Product Officer Alexandre Dayon sold 1,472 shares for $153.55, generating $226,020 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-Founder and CTO Parker Harris sold 620 shares for $156.08, generating $96,768 from the sale. These shares were sold indirectly through a trust.
  • Pres., Legal & General Counsel Amy E. Weaver sold 501 shares for $153.54, generating $76,925 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Accounting Officer Joe Allanson sold 327 shares for $153.55, generating $50,210 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director John Victor Roos sold 113 shares for $155.91, generating $17,618 from the sale.

You can view the list of recent insider transactions for salesforce.com, inc. here.

P/E: 108.05 Forward P/E: 45.05 Industry P/E: 21.77
P/S: 9.01 Price/Book: 7.62 EV/EBITDA: 77.56
Market Cap: $119.71B Avg. Daily Volume: 4,975,034 52 Week Range: $113.6 – $167.56

5. Mimecast Limited (MIME): $46.04

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

  • Director Neil Murray sold 139,496 shares for $46.64, generating $6.5 million from the sale. 114,496 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Executive Officer Peter Bauer sold 18,750 shares for $46.87, generating $878,784 from the sale. 7,500 of these shares were sold indirectly through a trust.

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

P/E: N/A Forward P/E: 68.72 Industry P/E: 40.22
P/S: 8.27 Price/Book: 16.22 EV/EBITDA: 96.23
Market Cap: $2.82B Avg. Daily Volume: 644,711 52 Week Range: $29.665 – $54.57

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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