Welcome to edition 475 of Insider Weekends. With earnings season in full swing, insider buying increased last week with insiders purchasing $75.89 million of stock last week compared to $10.39 million in the week prior. Selling also increased with insiders selling $584.61 million of stock last week compared to $450.43 million in the week prior. We are likely to see more interesting insider purchases over the next few weeks as more companies come out of their earnings related quiet periods.
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 7.7. In other words, insiders sold almost 8 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 43.36.
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. Air Products and Chemicals, Inc. (APD): $230.55
Chairman, President and CEO Seifi Ghasemi acquired 20,000 shares of this atmospheric gases provider, paying $227.16 per share for a total amount of $4.54 million. Mr. Ghasemi increased his stake by 4.61% to 453,783 shares with this purchase.
APD showed up on my radar in 2015 after a cluster of insider purchases by Mr. Ghasemi and other company insiders. His pace of buying moderated after that but he has not sold a single share of APD since we started tracking insider transactions in 2010 as you can see here. A series of strategic acquisitions including GE’s gasifications business and Europe’s largest independent CO2 business has helped the company consolidate market share and improve operating margins, which were 23.54% for the trailing twelve months. The company has managed to do this without taking on too much leverage and net debt on the balance sheet is less than $1.5 billion.
The market has handsomely rewarded the company’s performance with the stock up 43% over the last year compared to an 8% gain for the S&P 500 over the same period. Trading at 17 times EBITDA and over 4 times book, the stock is starting to look expensive at these levels.
You can view the list of recent insider transactions for Air Products and Chemicals, Inc. here.
|P/E: 29.83||Forward P/E: 24.55||Industry P/E: 18.01|
|P/S: 5.68||Price/Book: 4.46||EV/EBITDA: 16.6|
|Market Cap: $50.75B||Avg. Daily Volume: 1,166,419||52 Week Range: $148.44 – $231.45|
2. Crown Castle International Corp. (REIT) (CCI): $130.58
Director J. Landis Martin acquired 16,300 shares of this wireless tower REIT, paying $127.33 per share for a total amount of $2.08 million. Mr. Martin increased his stake by 14.26% to 130,617 shares with this purchase. These shares were purchased indirectly by various trusts.
We wrote the following about Crown Castle after a $2.26 million purchase by Mr. Martin in April of this year,
Mr. Martin has been on Crown Castle’s board since its inception in 1995 through November 1998 and then again from November 1999 through present. He has served as its non-executive Chairman since 2002. A lawyer by training, he has been the CEO of several publicly-held industrial, chemical and metals companies.
Crown Castle first showed up on my radar several years ago due to very heavy insider selling. In recent years, we have started seeing a string of insider buying and for 2019 most insider transactions have been either insider purchases or option exercises that were not followed by sales. Like most wireless tower companies, Crown Castle also converted to a real estate investment trust (REIT) structure in 2014. The company sports a dividend yield of 3.63% and like most wireless tower companies, excellent operating margins. I wonder if Mr. Martin and other insiders are looking at the upcoming 5G rollout as the impetus for further double digit revenue growth.
You can view the list of recent insider transactions for Crown Castle International Corp. (REIT) here.
|P/E: 75.96||Forward P/E: 65.29||Industry P/E: 39.88|
|P/S: 9.53||Price/Book: 4.71||EV/EBITDA: 24.98|
|Market Cap: $54.29B||Avg. Daily Volume: 1,821,123||52 Week Range: $103.21 – $137.85|
3. CNX Resources Corporation (CNX): $6.49
Director Bernard Lanigan Jr. acquired 200,000 shares of this oil & gas company, paying $6.39 per share for a total amount of $1.28 million. These shares were purchased indirectly by Conifer Partners III, LLC.
You can view the list of recent insider transactions for CNX Resources Corporation here.
|P/E: 7.39||Forward P/E: 9.83||Industry P/E: 7.29|
|P/S: 0.72||Price/Book: 0.3||EV/EBITDA: 5.77|
|Market Cap: $1.27B||Avg. Daily Volume: 4,643,903||52 Week Range: $6.35 – $16.42|
4. United Rentals, Inc. (URI): $127.61
Shares of this equipment rental company were acquired by 2 insiders:
- Director Donald C. Roof acquired 5,000 shares, paying $118.27 per share for a total amount of $591,362. Mr. Roof increased his stake by 36.54% to 18,684 shares with this purchase.
- Director Jose B. Alvarez acquired 238 shares, paying $125.98 per share for a total amount of $29,983. Mr. Alvarez increased his stake by 2.55% to 9,559 shares with this purchase.
You can view the list of recent insider transactions for United Rentals, Inc. here.
|P/E: 9.47||Forward P/E: 6.18||Industry P/E: 20.56|
|P/S: 1.12||Price/Book: 2.84||EV/EBITDA: 8.65|
|Market Cap: $9.85B||Avg. Daily Volume: 1,292,661||52 Week Range: $94.28 – $173|
5. The Bank of New York Mellon Corporation (BK): $47.6
Vice Chairman William M. Daley acquired 11,350 shares of this asset management company, paying $44.93 per share for a total amount of $509,921.
5,650 of these shares were purchased indirectly in an IRA.
You can view the list of recent insider transactions for The Bank of New York Mellon Corporation here.
|P/E: 12.38||Forward P/E: 11.33||Industry P/E: 25.48|
|P/S: 2.82||Price/Book: 1.18||EV/EBITDA: N/A|
|Market Cap: $44.87B||Avg. Daily Volume: 5,121,349||52 Week Range: $42.13 – $54.27|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Garmin Ltd. (GRMN): $78.29
Executive Chairman Min H. Kao sold 1,076,556 shares of this GPS manufacturer for $80.40, generating $86.56 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: 21.05||Forward P/E: 20.18||Industry P/E: 34.8|
|P/S: 4.37||Price/Book: 3.44||EV/EBITDA: 15.37|
|Market Cap: $14.86B||Avg. Daily Volume: 1,095,901||52 Week Range: $59.98 – $89.72|
2. Lockheed Martin Corporation (LMT): $369.46
Shares of this defense company company were sold by 3 insiders:
- Chairman, Pres. & CEO Marillyn A. Hewson sold 19,500 shares for $369.14, generating $7.19 million from the sale.
- Executive Vice President & CFO Kenneth R. Possenriede sold 2,000 shares for $363.85, generating $727,701 from the sale.
- SVP & General Counsel Maryanne Lavan sold 1,003 shares for $365.50, generating $366,600 from the sale.
You can view the list of recent insider transactions for Lockheed Martin Corporation here.
|P/E: 18.01||Forward P/E: 14.64||Industry P/E: 34.8|
|P/S: 1.81||Price/Book: 36.61||EV/EBITDA: 13.01|
|Market Cap: $104.33B||Avg. Daily Volume: 1,219,871||52 Week Range: $241.18 – $373.37|
3. FactSet Research Systems Inc. (FDS): $283.56
Director Philip A. Hadley sold 25,000 shares of this integrated financial information and analytical applications company for $285.60, generating $7.14 million from the sale.
You can view the list of recent insider transactions for FactSet Research Systems Inc. here.
|P/E: 33.36||Forward P/E: 27.01||Industry P/E: 201.26|
|P/S: 7.66||Price/Book: 16.56||EV/EBITDA: 22.34|
|Market Cap: $10.85B||Avg. Daily Volume: 440,007||52 Week Range: $188.31 – $305.38|
4. CarGurus, Inc. (CARG): $36.59
Director Anastasios Parafestas sold 191,400 shares of this online automotive marketplace company for $35.81, generating $6.85 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: 58.08||Forward P/E: 65.34||Industry P/E: 38.13|
|P/S: 8.29||Price/Book: 19.26||EV/EBITDA: 134.94|
|Market Cap: $4.07B||Avg. Daily Volume: 962,755||52 Week Range: $30.29 – $57.25|
5. Allegiant Travel Company (ALGT): $152.63
CEO and Chairman Maurice J. Gallagher Jr. sold 40,731 shares of this Airlines company for $154.40, generating $6.29 million from the sale.
You can view the list of recent insider transactions for Allegiant Travel Company here.
|P/E: 13.46||Forward P/E: 10.28||Industry P/E: 10.8|
|P/S: 1.42||Price/Book: 3.33||EV/EBITDA: 8.2|
|Market Cap: $2.49B||Avg. Daily Volume: 143,163||52 Week Range: $98.18 – $157.5|
You can view the full list of sales from this Insider Sales page.
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.