Insider Weekends: Eric Zinterhofer Purchases $20 Million Worth of Liberty Latin America

Welcome to edition 479 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $67.39 million of stock last week compared to $283.3 million in the week prior. Selling on the other hand increased with insiders selling $1.65 billion of stock last week compared to $1.6 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 24.42. In other words, insiders sold more than 24 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 5.66.

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. Liberty Latin America Ltd. (LILA): $15.31

Director Eric Louis Zinterhofer acquired 1,134,630 shares of this telecommunications company, paying $17.49 per share for a total amount of $19.85 million. These shares were purchased indirectly by Searchlight LEO, L.P.

Bermuda based LILA was spun out of John Malone’s Liberty Global in January 2018 and later that year acquired the 40% stake it did not already have in Libery Cablevision of Puerto Rico from Searchlight Capital Partners. Eric Zinterhofer is a founding partner of Searchlight Capital Partners and married to Aerin Lauder, the billionaire heiress and grand daughter of Estee Lauder.

LILA operates in 21 consumer and 30 B2B markets in Latin America and the Caribbean. Over the last year its stock has dropped more than 20% even as Comcast has seen its stock appreciate by more than 20% over the same time period. While both revenue and operating income have been growing, the company has been reporting a string of losses on account of high interest expenses, currency impacts and unusual items. Free cash flow was however positive in both 2018 and the trailing twelve months because of high depreciation and amortization expenses that exceeded CapEx.

The company reiterated its operating cash flow guidance of $1.525 billion for 2019 when it reported Q2 2019 results earlier this month and increased its adjusted free cash flow guidance from about $125 million to approximately $150 million. With nearly $6 billion in net debt on the balance sheet an Enterprise Value approaching $9 billion, the company trades for just under 6 times expected 2019 operating cash flow.

LILA vs. Comcast One Year Chart

LILA vs. Comcast One Year Chart (click to enlarge)

You can view the list of recent insider transactions for Liberty Latin America Ltd. here.

P/E: N/A Forward P/E: 153.1 Industry P/E: 15.74
P/S: 0.73 Price/Book: 0.93 EV/EBITDA: 7.09
Market Cap: $2.77B Avg. Daily Volume: 224,986 52 Week Range: $13.96 – $22.2

2. Red Rock Resorts, Inc. (RRR): $19.16

Director Lorenzo J. Fertitta acquired 144,150 shares of this resorts & casinos company, paying $18.60 per share for a total amount of $2.68 million. These shares were purchased indirectly by various trusts and entities.

This is the second week in a row we have seen purchases of Red Rock Resorts by Mr. Fertitta. He also purchased $18.58 million with of stock last week.

You can view the list of recent insider transactions for Red Rock Resorts, Inc. here.

P/E: 14.99 Forward P/E: 11.9 Industry P/E: 60.57
P/S: 1.32 Price/Book: 2.52 EV/EBITDA: 9.07
Market Cap: $2.24B Avg. Daily Volume: 775,530 52 Week Range: $16.76 – $33.34

3. Donnelley Financial Solutions, Inc. (DFIN): $10.84

Director Jeffrey Jacobowitz acquired 314,057 shares of this risk and compliance solutions company, paying $11.42 per share for a total amount of $3.59 million. These shares were purchased indirectly by Simcoe Capital Management, LLC.

You can view the list of recent insider transactions for Donnelley Financial Solutions, Inc. here.

P/E: 5.87 Forward P/E: 7.23 Industry P/E: 34.58
P/S: 0.41 Price/Book: 1.49 EV/EBITDA: 9.68
Market Cap: $371.81M Avg. Daily Volume: 148,314 52 Week Range: $10.62 – $21.44

4. Fossil Group, Inc. (FOSL): $10.4

Shares of this consumer fashion accessories company were acquired by 2 insiders:

  • Executive Vice President Gregory A. McKelvey acquired 200,000 shares, paying $10.07 per share for a total amount of $2.01 million. Mr. McKelvey increased his stake by 59.49% to 536,215 shares with this purchase.
  • Executive Vice President Darren E. Hart acquired 20,000 shares, paying $10.03 per share for a total amount of $200,600. Mr. Hart increased his stake by 17.14% to 136,694 shares with this purchase.

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

P/E: 15.64 Forward P/E: 18.57 Industry P/E: 24.65
P/S: 0.22 Price/Book: 0.97 EV/EBITDA: 5.33
Market Cap: $524.91M Avg. Daily Volume: 1,159,669 52 Week Range: $9 – $26.89

5. Target Hospitality Corp. (TH): $6.2

Shares of this specialty rental accommodations provider were acquired by 6 insiders:

  • Director Stephen Robertson acquired 175,000 shares, paying $6.77 per share for a total amount of $1,184,750.
  • Director Andrew P. Studdert acquired 40,000 shares, paying $6.96 per share for a total amount of $278,300. Mr. Studdert increased his stake by 400.00% to 50,000 shares with this purchase.
  • Director Gary Lindsay acquired 35,935 shares, paying $6.95 per share for a total amount of $249,866. Mr. Lindsay increased his stake by inf% to 35,935 shares with this purchase.
  • Director Jeffrey Sagansky acquired 25,000 shares, paying $6.67 per share for a total amount of $166,750. Mr. Sagansky increased his stake by 0.75% to 3,350,000 shares with this purchase.
  • Director Martin L. Jimmerson acquired 10,000 shares, paying $6.50 per share for a total amount of $65,000. Mr. Jimmerson increased his stake by inf% to 10,000 shares with this purchase.
  • Director Eli Baker acquired 7,500 shares, paying $6.85 per share for a total amount of $51,375. Mr. Baker increased his stake by 0.93% to 814,500 shares with this purchase.

You can view the list of recent insider transactions for Target Hospitality Corp. here.

P/E: N/A Forward P/E: 7.75 Industry P/E: 29.15
P/S: 2.3 Price/Book: 4.96 EV/EBITDA: 11.04
Market Cap: $652.44M Avg. Daily Volume: 471,296 52 Week Range: $5.65 – $12.11

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $177.75

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 606,425 shares for $184.25, generating $111.73 million from the sale. These shares were sold indirectly by various entities.
  • Chief Accounting Officer Susan J.S. Taylor sold 1,134 shares for $185.45, generating $210,300 from the sale.

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

P/E: 30.06 Forward P/E: 18.69 Industry P/E: 40.18
P/S: 8.1 Price/Book: 5.72 EV/EBITDA: 17.44
Market Cap: $507.11B Avg. Daily Volume: 16,986,865 52 Week Range: $123.02 – $208.66

2. Avalara, Inc. (AVLR): $86.07

Shares of this software application company were sold by 4 insiders:

  • Director Edward A. Gilhuly sold 250,000 shares for $85.81, generating $21.45 million from the sale. These shares were sold indirectly by a trust.
  • Chairman and Chief Executive Officer Scott M. McFarlane sold 175,000 shares for $86.21, generating $15.09 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Financial Officer and Treasurer William Ingram sold 25,000 shares for $85.53, generating $2.14 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President, General Counsel, and Secretary Alesia Lee Pinney sold 3,248 shares for $85.06, generating $276,275 from the sale.

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

P/E: N/A Forward P/E: N/A Industry P/E: 32.5
P/S: 20.11 Price/Book: 14.36 EV/EBITDA: -139.31
Market Cap: $6.5B Avg. Daily Volume: 1,126,912 52 Week Range: $28.09 – $94.31

3. Guardant Health, Inc. (GH): $94.64

Shares of this diagnostics & research company were sold by 2 insiders:

  • Chairman, President and COO Amirali Talasaz sold 100,000 shares for $100.17, generating $10.02 million from the sale. These shares were sold indirectly by a trust and 25,057 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Financial Officer Derek A. Bertocci sold 42,548 shares for $100.00, generating $4.25 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 Guardant Health, Inc. here.

P/E: N/A Forward P/E: -71.7 Industry P/E: 98.31
P/S: 60.6 Price/Book: 10.77 EV/EBITDA: -102.04
Market Cap: $8.8B Avg. Daily Volume: 956,325 52 Week Range: $27.04 – $112.22

4. SolarEdge Technologies, Inc. (SEDG): $80.9

Shares of this solar company were sold by 3 insiders:

  • VP Research & Development Yoav Galin sold 97,500 shares for $84.22, generating $8.21 million from the sale.
  • Chief Financial Officer Ronen Faier sold 50,000 shares for $84.63, generating $4.23 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • VP,GC  and Corporate Secretary Rachel Prishkolnik sold 7,834 shares for $84.23, generating $659,839 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 SolarEdge Technologies, Inc. here.

P/E: 35.51 Forward P/E: 18.18 Industry P/E: 20.78
P/S: 3.54 Price/Book: 5.76 EV/EBITDA: 23.7
Market Cap: $3.88B Avg. Daily Volume: 769,144 52 Week Range: $32.425 – $89.43

5. RealPage, Inc. (RP): $63.7

Chairman President & CEO Stephen T. Winn sold 200,000 shares of this software application company for $62.92, generating $12.58 million from the sale. These shares were sold indirectly by Seren Capital, Ltd.

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

P/E: 147.11 Forward P/E: 30.92 Industry P/E: 32.5
P/S: 6.49 Price/Book: 5.26 EV/EBITDA: 41.13
Market Cap: $6.04B Avg. Daily Volume: 687,058 52 Week Range: $42.9 – $66.25

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 GE. 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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