Welcome to edition 472 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $58.39 million of stock compared to $131.18 million in the week prior. Selling also decreased with insiders selling $704.94 million of stock last week compared to $1.14 billion in the week prior. With the start of a new quarter and most companies entering a pre-earnings quiet period, insider activity is likely to remain muted for a few weeks.
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 12.07. In other words, insiders sold more than 12 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 8.67.
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. Worthington Industries, Inc. (WOR): $40.1
Director John B. Blystone acquired 25,000 shares of this metals manufacturing company, paying $39.88 per share for a total amount of $997,068. Mr. Blystone increased his stake by 15.21% to 189,370 shares with this purchase.
Mr. Blystone also purchased 25,000 shares of Worthington Industries last December at an average price of $36.67. He has been a long serving director of Worthington and has been on the board since 1997. Worthington’s steel can be found in 50% of US cars and the company generates 37% of its revenue from the automotive industry.
While the company has managed to increase its revenue with acquisitions of companies focused on value-added engineered products, net margin has declined in each of the last two years. As a result, the stock has had a rough couple of years. A couple of positive signs besides this insider purchase include the company buying back its stock and increasing its dividend in each of the last four years. The dividend payout ratio is a healthy 30.21% and the company appears to have a manageable amount of debt.
You can view the list of recent insider transactions for Worthington Industries, Inc. here.
|P/E: 16.38||Forward P/E: 12.38||Industry P/E: 11.53|
|P/S: 0.59||Price/Book: 2.63||EV/EBITDA: 12.68|
|Market Cap: $2.22B||Avg. Daily Volume: 201,685||52 Week Range: $31.42 – $48.57|
2. Carnival Corporation (CCL): $46.91
Director Randall J. Weisenburger acquired 20,000 shares of this cruise line company, paying $46.50 per share for a total amount of $930,000. Mr. Weisenburger increased his stake by 19.43% to 122,934 shares with this purchase.
It is interesting to see a second insider of Carnival purchase shares just a few days after we reported a purchase by the CEO last week. Carnival is trading close to a 52 week low after declining 19% over the last year even as its competitors like Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean Cruises (RCL) continue to do well with high single digit gains and outperforming the S&P 500.
I looked into the industry in 2016 and wrote an article about Norwegian Cruise Line Holdings titled Norwegian Cruise Line: Time To Take A Luxury Cruise? after all three companies had declined sharply and a cluster of insiders started buying shares at both NCLH and RCL. Back then I found NCLH the most interesting of the group and CCL had the lowest margins. It looks like CCL has closed the gap since then and its margins have improved.
Unless we see clear signs of a large global economic slowdown, low interest rates combined with low oil prices should continue to provide tail winds to the cruise industry but we are much closer to the end of this cycle than we were back in 2016.
You can view the list of recent insider transactions for Carnival Corporation here.
|P/E: 10.98||Forward P/E: 9.71||Industry P/E: 31.59|
|P/S: 1.7||Price/Book: 1.34||EV/EBITDA: 7.96|
|Market Cap: $33.61B||Avg. Daily Volume: 4,183,141||52 Week Range: $44.76 – $67.69|
3. Conagra Brands, Inc. (CAG): $28.06
Director Craig P. Omtvedt acquired 25,000 shares of this packaged foods company, paying $26.73 per share for a total amount of $668,250. Mr. Omtvedt increased his stake by 249.33% to 35,027 shares with this purchase.
You can view the list of recent insider transactions for Conagra Brands, Inc. here.
|P/E: 18.39||Forward P/E: 12.2||Industry P/E: 21.95|
|P/S: 1.43||Price/Book: 1.83||EV/EBITDA: 12.37|
|Market Cap: $13.63B||Avg. Daily Volume: 5,185,243||52 Week Range: $20.22 – $38.43|
4. Greif, Inc. (GEF): $33.87
Share of this packaging company were acquired by two insider:
- President and CEO Peter G. Watson acquired 15,000 shares, paying $32.71 per share for a total amount of $490,650.
- Director Mark A. Emkes acquired 1,190 shares, paying $32.75 per share for a total amount of $38,973.
You can view the list of recent insider transactions for Greif, Inc. here.
|P/E: 10.78||Forward P/E: 8.34||Industry P/E: 23.14|
|P/S: 0.46||Price/Book: 1.50||EV/EBITDA: 8.25|
|Market Cap: $1.87B||Avg. Daily Volume: 249,920||52 Week Range: $30.12 – $59.00|
5. First Guaranty Bancshares, Inc. (FGBI): $20.8
Director Edgar R. Smith III acquired 23,000 shares of this regional bank, paying $20.20 per share for a total amount of $464,600. These shares were purchased indirectly by Smith & Hood Investments, LLC.
You can view the list of recent insider transactions for First Guaranty Bancshares, Inc. here.
|P/E: 13.32||Forward P/E: 10.4||Industry P/E: 19.14|
|P/S: 2.95||Price/Book: 1.19||EV/EBITDA: N/A|
|Market Cap: $181.17M||Avg. Daily Volume: 4,759||52 Week Range: $19.02 – $27.63|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Garmin Ltd. (GRMN): $79.75
Executive Chairman Min H. Kao sold 513,429 shares of this GPS manufacturer for $79.79, generating $40.97 million from the sale. These shares were sold indirectly by Mr. Kao’s children.
You can view the list of recent insider transactions for Garmin Ltd. here.
|P/E: 21.44||Forward P/E: 20.55||Industry P/E: 34.21|
|P/S: 4.42||Price/Book: 3.51||EV/EBITDA: 15.85|
|Market Cap: $15.04B||Avg. Daily Volume: 1,065,530||52 Week Range: $59.98 – $89.72|
2. Q2 Holdings, Inc. (QTWO): $77.29
Shares of this software – infrastructure company were sold by 3 insiders:
- Director R. H. Seale sold 137,000 shares for $76.48, generating $10.48 million from the sale. These shares were sold indirectly by RHS Investments-I, L.P.
- President and CEO Matthew P. Flake sold 25,000 shares for $76.58, generating $1.91 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Chief Strategy Officer William M. Furrer sold 13,301 shares for $76.18, generating $1.01 million 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 Q2 Holdings, Inc. here.
|P/E: N/A||Forward P/E: 168.02||Industry P/E: 136.13|
|P/S: 14.13||Price/Book: 22.38||EV/EBITDA: -141.18|
|Market Cap: $3.64B||Avg. Daily Volume: 466,746||52 Week Range: $43.41 – $79.57|
3. CarGurus, Inc. (CARG): $36.13
Shares of this online automotive marketplace company were sold by 2 insiders:
- CEO and Chairman Langley Steinert sold 176,109 shares for $36.05, generating $6.35 million from the sale. These shares were sold indirectly through a trust.
- Director Anastasios Parafestas sold 125,000 shares for $35.87, generating $4.48 million from the sale. These shares were sold indirectly by Argonaut 22 LLC.
You can view the list of recent insider transactions for CarGurus, Inc. here.
|P/E: 57.35||Forward P/E: 64.52||Industry P/E: 38.13|
|P/S: 8.19||Price/Book: 19.02||EV/EBITDA: 133.21|
|Market Cap: $4.02B||Avg. Daily Volume: 1,072,154||52 Week Range: $30.29 – $57.25|
4. Zillow Group, Inc. (Z): $48.42
Chairman and President Lloyd D. Frink sold 232,400 shares of this restaurant chain for $45.08, generating $10.48 million from the sale. 57,400 of these shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Zillow Group, Inc. here.
|P/E: N/A||Forward P/E: -172.93||Industry P/E: 59.91|
|P/S: 6.65||Price/Book: 3.03||EV/EBITDA: -305.58|
|Market Cap: $9.9B||Avg. Daily Volume: 3,229,690||52 Week Range: $26.38 – $63.86|
5. Shake Shack Inc. (SHAK): $73.57
Director Daniel Harris Meyer sold 125,000 shares of this restaurant chain for $69.63, generating $8.7 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Shake Shack Inc. here.
|P/E: 156.87||Forward P/E: 99.42||Industry P/E: 68.28|
|P/S: 5.55||Price/Book: 9.24||EV/EBITDA: 37.76|
|Market Cap: $2.73B||Avg. Daily Volume: 712,214||52 Week Range: $40.67 – $73.8|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Zillow (Z). 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.