Insider Weekends: Trio of AbbVie Insiders Buy Shares

Welcome to edition 471 of Insider Weekends. Insider buying declined marginally last week with insiders purchasing $131.18 million of stock compared to $132.07 million in the week prior. Selling also decreased with insiders selling $1.14 billion of stock last week compared to $1.18 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 8.67. 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 8.89.

Insider Sector Heat Map June 28, 2019

Insider Sector Heat Map June 28, 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. AbbVie Inc. (ABBV): $72.72

Shares of this drug manufacturer were acquired by 3 insiders:

  • EVP, Finance & Administration William J. Chase acquired 30,400 shares, paying $67.30 per share for a total amount of $2.05 million. Mr. Chase increased his stake by 21.85% to 169,552 shares with this purchase.
  • Director Roxanne S. Austin acquired 11,500 shares, paying $67.50 per share for a total amount of $776,250. Mr. Austin increased his stake by 28.32% to 52,114 shares with this purchase.
  • Director Edward J. Rapp acquired 7,500 shares, paying $67.30 per share for a total amount of $504,750. Mr. Rapp increased his stake by 32.38% to 30,662 shares with this purchase.

AbbVie announced its decision last week to acquire fellow pharma company Allergan (AGN), in a $63 billion cash plus stock deal that valued the maker of Botox at approximately $188 per share. Investors promptly bid down the stock of AbbVie to a fresh 52 week low on June 25th, when the stock closed at $65.70, more than 16% below its previous close. Part of the selling could have also been arbitrageurs selling AbbVie shares short to lock in the nearly 9% arbitrage spread on the deal.

This trio of AbbVie insiders acted quickly and picked up shares just a day after the deal was announced and before the stock rebounded to end the week at $72.72.

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

P/E: 20.71 Forward P/E: 7.7 Industry P/E: 32.35
P/S: 3.29 Price/Book: N/A EV/EBITDA: 10.05
Market Cap: $107.51B Avg. Daily Volume: 7,722,309 52 Week Range: $65.06 – $100.23

2. Scientific Games Corporation (SGMS): $19.82

Director Ronald O. Perelman acquired 75,000 shares of this casino gaming machines company, paying $20.21 per share for a total amount of $1.52 million. These shares were purchased indirectly through a trust.

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

P/E: N/A Forward P/E: 23.05 Industry P/E: 60.56
P/S: 0.54 Price/Book: N/A EV/EBITDA: 10.1
Market Cap: $1.84B Avg. Daily Volume: 1,496,903 52 Week Range: $14.79 – $51.53

3. Entercom Communications Corp. (ETM): $5.8

Chairman Emeritus Joseph M. Field acquired 200,000 shares of this radio broadcasting company, paying $5.96 per share for a total amount of $1.19 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Entercom Communications Corp. here.

P/E: N/A Forward P/E: 5 Industry P/E: 24.46
P/S: 0.55 Price/Book: 0.62 EV/EBITDA: 9.1
Market Cap: $803.09M Avg. Daily Volume: 1,201,487 52 Week Range: $5.16 – $8.6

4. Carnival Corporation (CCL): $46.55

President & CEO Arnold W. Donald acquired 22,050 shares of this cruise line company, paying $45.23 per share for a total amount of $997,267.

13,300 of these shares were purchased indirectly through a trust.

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

P/E: 10.9 Forward P/E: 9.62 Industry P/E: 63.52
P/S: 1.68 Price/Book: 1.33 EV/EBITDA: 7.91
Market Cap: $33.35B Avg. Daily Volume: 4,202,768 52 Week Range: $44.76 – $67.69

5. Biohaven Pharmaceutical Holding Company Ltd. (BHVN): $43.79

Shares of this biotech company were acquired by 4 insiders:

  • Director John W. Childs acquired 10,000 shares, paying $40.37 per share for a total amount of $403,700. These shares were purchased indirectly through a trust.
  • Chief Executive Officer Vlad Coric acquired 5,000 shares, paying $40.22 per share for a total amount of $201,100. These shares were purchased indirectly by a 401(k) plan.
  • Chief Financial Officer James Engelhart acquired 2,500 shares, paying $43.05 per share for a total amount of $107,625.
  • Chief Medical Officer Robert Berman acquired 2,500 shares, paying $42.30 per share for a total amount of $105,750. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Biohaven Pharmaceutical Holding Company Ltd. here.

P/E: N/A Forward P/E: -8.64 Industry P/E: N/A
P/S: N/A Price/Book: 19.99 EV/EBITDA: -8.84
Market Cap: $2.26B Avg. Daily Volume: 1,035,542 52 Week Range: $29.17 – $67.86

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

Notable Insider Sales:

1. Ares Management Corporation (ARES): $26.17

Shares of this asset management company were sold by 2 insiders:

  • Partner Kipp R. Deveer sold 431,247 shares for $27.12, generating $11.69 million from the sale.
  • Co-Founder, CEO & President Michael J. Arougheti sold 216,476 shares for $26.54, generating $5.75 million from the sale.

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

P/E: 323.09 Forward P/E: 13.56 Industry P/E: 26.9
P/S: 4.93 Price/Book: 8.97 EV/EBITDA: 60.87
Market Cap: $5.76B Avg. Daily Volume: 990,255 52 Week Range: $16.185 – $28.58

2. American Financial Group, Inc. (AFG): $102.47

Co-CEO & Co-President Carl H. Lindner III sold 150,000 shares of this insurance company for $103.61, generating $15.54 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for American Financial Group, Inc. here.

P/E: 13 Forward P/E: 11.53 Industry P/E: 11.69
P/S: 1.25 Price/Book: 1.62 EV/EBITDA: 8.58
Market Cap: $9.19B Avg. Daily Volume: 343,153 52 Week Range: $84.18 – $114.8

3. Copart, Inc. (CPRT): $74.74

Chief Executive Officer Jayson A. Adair sold 179,461 shares of this online vehicle auction company for $74.54, generating $13.38 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 32.95 Forward P/E: 29.43 Industry P/E: 22.21
P/S: 8.79 Price/Book: 10.56 EV/EBITDA: 23.38
Market Cap: $17.12B Avg. Daily Volume: 1,380,385 52 Week Range: $44.61 – $75.5

4. CarGurus, Inc. (CARG): $36.11

Director Anastasios Parafestas sold 274,531 shares of this online automotive marketplace company for $38.11, generating $10.46 million from the sale. These shares were sold indirectly by various trusts and entities.

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

P/E: 57.32 Forward P/E: 64.48 Industry P/E: 39.68
P/S: 8.18 Price/Book: 19.01 EV/EBITDA: 133.13
Market Cap: $4.02B Avg. Daily Volume: 1,078,839 52 Week Range: $30.29 – $57.25

5. Facebook, Inc. (FB): $193

Chief Operating Officer Sheryl Sandberg sold 55,000 shares of Facebook for $189.76, generating $10.44 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 28.64 Forward P/E: 20.62 Industry P/E: 39.4
P/S: 9.35 Price/Book: 6.37 EV/EBITDA: 18.68
Market Cap: $550.92B Avg. Daily Volume: 17,387,561 52 Week Range: $123.02 – $218.62

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 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria

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