Welcome to edition 470 of Insider Weekends. Insider buying increased last week with insiders purchasing $132.07 million of stock compared to $93.05 million in the week prior. Selling on the other hand decreased with insiders selling $1.18 billion of stock last week compared to $1.97 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 dropped to 8.89. In other words, insiders sold almost 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 21.15.
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. Prospect Capital Corporation (PSEC): $6.6
Chief Executive Officer John F. Barry acquired 780,232 shares of this business development company, paying $6.35 per share for a total amount of $4.96 million. Mr. Barry increased his stake by 2.03% to 39,309,766 shares with this purchase.
You can view the list of recent insider transactions for Prospect Capital Corporation here.
|P/E: 10.96||Forward P/E: 8.68||Industry P/E: 10.42|
|P/S: 3.39||Price/Book: 0.73||EV/EBITDA: N/A|
|Market Cap: $2.42B||Avg. Daily Volume: 1,493,774||52 Week Range: $5.7 – $7.6|
2. Scientific Games Corporation (SGMS): $18.99
Director Ronald O. Perelman acquired 230,000 shares of this casino gaming machines company, paying $20.02 per share for a total amount of $4.61 million. These shares were purchased indirectly through a trust.
Mr. Perelman also purchased $4.95 million worth of Scientific Games stock last December and we wrote the following after that purchase,
The seventy five year old corporate raider of the 1980s turned philanthropist was active this December making multiple purchases in three stocks including Scientific Games, Revlon (REV) and vTv Therapeutics (VTVT). While Scientific Games and Revlon have market caps of over $1 billion, vTv is a tiny microcap stock, which shot up 120.39% last Friday on volume that was 243 times the volume of shares traded on Thursday. I did not see any other news for vTv and this huge move appears to be on account of Mr. Perelman’s purchase through his holding company MacAndrews & Forbes Incorporated. We saw a similar huge move in VTVT in October following Mr. Perelman’s purchases but the stock eventually gave back most of those gains.
You can view the list of recent insider transactions for Scientific Games Corporation here.
|P/E: N/A||Forward P/E: 22.08||Industry P/E: 18.53|
|P/S: 0.52||Price/Book: N/A||EV/EBITDA: 10.18|
|Market Cap: $1.76B||Avg. Daily Volume: 1,430,226||52 Week Range: $14.79 – $52.6|
3. First Citizens BancShares, Inc. (FCNCA): $435.23
Shares of this regional bank were acquired by 2 insiders:
- Chairman and CEO Frank B. Holding Jr. acquired 6,293 shares, paying $375.00 per share for a total amount of $2.36 million. 1,100 of these shares were purchased indirectly by the reporting person as custodian for L.R. Holding II.
- 10% Owner Olivia Britton Holding acquired 2,250 shares, paying $375.00 per share for a total amount of $843,750.
The shares purchased by this brother-sister duo were class B shares which are more thinly traded than the class A shares and trade at a lower price. We came across First Citizens BancShares back in August 2010 when we first started tracking insider purchases and noticed Mr. Holding and his father consistently purchase shares several months in a row. We wrote the following about those purchases in October 2010,
Mr. Holding has been buying shares of this regional bank for several months now but in small quantities. First Citizens BancShares is a holding company for First-Citizens Bank & Trust Company and IronStone Bank. The holding company trades just above book value and has a small dividend yield of just 0.7%. First-Citizens Bank & Trust Company has a low Troubled Asset Ratio (TAR) of 10.5 when compared to the national median of 15. IronStone Bank has a TAR of 15.2. Assets have grown at both banks year-over-year but more significantly at First-Citizens Bank & Trust Company, which now has over $18 billion in assets.
You can view the list of recent insider transactions for First Citizens BancShares, Inc. here.
|P/E: 12.5||Forward P/E: N/A||Industry P/E: 18.78|
|P/S: 3.07||Price/Book: 1.41||EV/EBITDA: N/A|
|Market Cap: $4.88B||Avg. Daily Volume: 52,817||52 Week Range: $355.18 – $488.44|
4. Hyster-Yale Materials Handling, Inc. (HY): $53.77
Chairman Alfred M. Rankin acquired 25,066 shares of this truck manufacturing company, paying $51.16 per share for a total amount of $1.28 million. 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: 38.68||Forward P/E: 9.08||Industry P/E: 28.92|
|P/S: 0.28||Price/Book: 1.72||EV/EBITDA: 18.77|
|Market Cap: $895.61M||Avg. Daily Volume: 77,065||52 Week Range: $43.26 – $76.79|
5. Entercom Communications Corp. (ETM): $6.01
Chairman Emeritus Joseph M. Field acquired 200,000 shares of this radio broadcasting company, paying $5.98 per share for a total amount of $1.19 million. These shares were purchased indirectly through a trust.
Entercom Communications merged with CBS Radio in November 2017 but the potential synergies of the merger have not translated to an improvement in the company’s bottom line over the last 19 months. Revenue went up more than 200% after the merger but earnings have been volatile. The extra $1.4 billion in net debt the company took on as a result of the merger has been a drag on earnings as is often the case with these mergers. The company is not paying down that debt but pays out a generous dividend that translates into a yield of nearly 6% at a 45% payout ratio.
While cord cutting continues to hurt traditional TV, radio has not suffered as much from the digital transformation to mobile devices with instantaneous access to audio content. The upcoming elections in 2020 will probably provide a boost to revenue and ETM is positioned well to capitalize on those tail winds. This could be one of the reasons Mr. Field has been an enthusiastic buyer of Entercom Communications stock for the better part of the last two years as you can see here.
You can view the list of recent insider transactions for Entercom Communications Corp. here.
|P/E: N/A||Forward P/E: 5.18||Industry P/E: 24.46|
|P/S: 0.58||Price/Book: 0.64||EV/EBITDA: 9.2|
|Market Cap: $857.08M||Avg. Daily Volume: 1,236,755||52 Week Range: $5.16 – $8.6|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Workday, Inc. (WDAY): $216.33
Shares of this enterprise software company were sold by 3 insiders:
- Director David A. Duffield sold 175,000 shares for $208.28, generating $36.45 million from the sale. These shares were sold indirectly by Dave & Cheryl Duffield Foundation.
- Co-President Gomez Luciano Fernandez sold 7,344 shares for $209.36, generating $1.54 million from the sale.
- Chief Products Officer Petros Dermetzis sold 6,422 shares for $208.35, generating $1.34 million from the sale.
You can view the list of recent insider transactions for Workday, Inc. here.
|P/E: N/A||Forward P/E: 96.15||Industry P/E: 32.58|
|P/S: 16.17||Price/Book: 23.8||EV/EBITDA: -179.87|
|Market Cap: $48.98B||Avg. Daily Volume: 1,644,944||52 Week Range: $117.24 – $221|
2. Intuit Inc. (INTU): $261.51
Chairman of Exec. Committee Scott D. Cook sold 133,334 shares of this software application company for $262.87, generating $35.05 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Intuit Inc. here.
|P/E: 47.75||Forward P/E: 34.68||Industry P/E: 149.1|
|P/S: 10.28||Price/Book: 16.66||EV/EBITDA: 33.25|
|Market Cap: $67.79B||Avg. Daily Volume: 1,486,338||52 Week Range: $182.61 – $272.14|
3. Chubb Limited (CB): $149.64
Chairman & CEO Evan G. Greenberg sold 215,648 shares of this insurance company for $148.84, generating $32.09 million from the sale.
You can view the list of recent insider transactions for Chubb Limited here.
|P/E: 17.74||Forward P/E: 13.16||Industry P/E: 27.62|
|P/S: 2.09||Price/Book: 1.31||EV/EBITDA: 15.62|
|Market Cap: $68.52B||Avg. Daily Volume: 1,369,192||52 Week Range: $119.54 – $152|
4. Tiffany & Co. (TIF): $93.62
Director Francesco Trapani sold 250,000 shares of this luxury jewelry retailer for $92.10, generating $23.03 million from the sale. These shares were sold indirectly by Argenta Holdings Sarl.
You can view the list of recent insider transactions for Tiffany & Co. here.
|P/E: 20.17||Forward P/E: 17.43||Industry P/E: 34.75|
|P/S: 2.58||Price/Book: 3.6||EV/EBITDA: 13.23|
|Market Cap: $11.37B||Avg. Daily Volume: 1,730,852||52 Week Range: $73.04 – $141.64|
5. SharpSpring, Inc. (SHSP): $12.88
Director Daniel Allen sold 1,763,454 shares of this marketing technology company for $12.25, generating $21.6 million from the sale. These shares were sold indirectly by various entities.
You can view the list of recent insider transactions for SharpSpring, Inc. here.
|P/E: N/A||Forward P/E: -24.3||Industry P/E: 20.65|
|P/S: 7.11||Price/Book: 5.78||EV/EBITDA: -19.44|
|Market Cap: $140.75M||Avg. Daily Volume: 92,717||52 Week Range: $8.41 – $21.1|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold long positions in Workday (WDAY) and Entercom Communications (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.