Welcome to edition 477 of Insider Weekends. Insider buying decreased last week with insiders purchasing $108.48 million of stock last week compared to $128.07 million in the week prior. Selling also decreased with insiders selling $2.16 billion of stock last week compared to $3.09 billion in the week prior. Over 45% of the sales this week were on account of a large sale of Amazon stock by Jeff Bezos. He also accounted for nearly 60% of all insider sales last week.
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 19.92. In other words, insiders sold almost 20 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 24.18.
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. DISH Network Corporation (DISH): $32.39
Chairman Charles W. Ergen acquired 500,005 shares of DISH Network, paying $31.45 per share for a total amount of $15.72 million. Mr. Ergen increased his stake by 36.87% to 1,856,075 shares with this purchase.
We have written about insider purchases by the founder and EVP of DISH Network, James DeFranco several times in the past and it is interesting to see Mr. Ergen join him with a large purchase. The insider buying at DISH Network kicked off in late May and early June of 2018 with a duo of purchases by Messrs Ergen and DeFranco when the stock dipped below $30. Mr. DeFranco continued buying and his purchases from June 2018 through February 2019 totaled $11.84 million.
For a while, it looked like their purchases were motivated by Wall Street undervaluing the wireless spectrum they were holding but in recent weeks it looks like DISH Network could emerge as the fourth largest wireless carrier in the country if Sprint and T-Mobile are allowed to merge. A precondition for the approval of the merger by the DOJ was that Sprint and T-Mobile divest certain assets and enable DISH’s entry as a viable wireless carrier.
Wharton’s Joseph Harrington and Erik Gordon from the University of Michigan provide additional color about the Sprint and T-Mobile merger and its impact on DISH here. After a big run up to $43.62 following the DOJ settlement, DISH stock has settled lower and is now below where it was after the DOJ announcement. The market could be worried about execution risk for DISH or that the Sprint and T-Mobile is not a done deal. Several states filed lawsuits to block the deal before both the FCC and DOJ blessed the merger and those lawsuits are still unresolved. The spread on the Sprint and T-Mobile merger that had widened to 37.76% on May 2, 2019 contracted to 8.14% after the DOJ announcement as you can see from our merger spread chart below. The spread has recently once again widened to 16.75% reflecting the market’s perception of higher risk for the deal.
If Sprint and T-Mobile can convince the states to allow the merger to proceed and DISH enters this new line of business, the company could reverse the long and slow decline in revenue it has experienced since 2015 and could be the reason why Mr. Ergen is feeling bullish about DISH’s prospects.
You can view the list of recent insider transactions for DISH Network Corporation here.
|P/E: 11.91||Forward P/E: 16.53||Industry P/E: 24.46|
|P/S: 1.16||Price/Book: 1.63||EV/EBITDA: 11.09|
|Market Cap: $15.22B||Avg. Daily Volume: 3,095,880||52 Week Range: $23.22 – $44.66|
2. Ford Motor Company (F): $9.45
Executive Chairman William Clay Ford acquired 840,962 shares of Ford, paying $9.51 per share for a total amount of $7.99 million. Mr. Ford increased his stake by 323.88% to 1,100,617 shares with this purchase.
You can view the list of recent insider transactions for Ford Motor Company here.
|P/E: 17.5||Forward P/E: 6.75||Industry P/E: 14.95|
|P/S: 0.24||Price/Book: 1.07||EV/EBITDA: 14.1|
|Market Cap: $37.7B||Avg. Daily Volume: 36,960,038||52 Week Range: $7.41 – $10.56|
3. MPLX LP (MPLX): $27.36
Shares of this midstream energy infrastructure and logistics company were acquired by 3 insiders:
- Chairman, CEO Gary R. Heminger acquired 42,600 shares, paying $27.18 per share for a total amount of $1.16 million. These shares were purchased indirectly by Mr. Heminger as UTMA custodian for his grandchildren.
- Director Dan D. Sandman acquired 36,630 shares, paying $27.26 per share for a total amount of $998,534. Mr. Sandman increased his stake by 59.81% to 97,872 shares with this purchase.
- Director Garry L. Peiffer acquired 18,000 shares, paying $27.15 per share for a total amount of $488,646. These shares were purchased indirectly through a trust.
You can view the list of recent insider transactions for MPLX LP here.
|P/E: 11.9||Forward P/E: 10.25||Industry P/E: 44.74|
|P/S: 4.5||Price/Book: 3.28||EV/EBITDA: 13.87|
|Market Cap: $28.92B||Avg. Daily Volume: 2,427,807||52 Week Range: $26.77 – $38.24|
4. Northern Oil and Gas, Inc. (NOG): $1.7
Shares of this independent energy company were acquired by 4 insiders:
- 10% Owner Robert B. Rowling acquired 1,508,382 shares, paying $1.55 per share for a total amount of $2.34 million.
- Director Bahram Akradi acquired 1,337,588 shares, paying $1.6 per share for a total amount of $2.15 million.
- EVP, General Counsel & Secretary Erik J. Romslo acquired 32,052 shares, paying $1.56 per share for a total amount of $50,001.
- EVP of Land, Adam A. Dirlam acquired 16,000 shares, paying $1.56 per share for a total amount of $24,960.
You can view the list of recent insider transactions for Northern Oil and Gas, Inc. here.
|P/E: 3.51||Forward P/E: 2.93||Industry P/E: 4.46|
|P/S: 1.29||Price/Book: 1.69||EV/EBITDA: 2.75|
|Market Cap: $677.54M||Avg. Daily Volume: 6,392,303||52 Week Range: $1.41 – $4.49|
5. 2U, Inc. (TWOU): $15.16
Shares of this e-learning software company were acquired by 2 insiders:
- Director Robert M. Stavis acquired 75,000 shares, paying $13.43 per share for a total amount of $1.01 million. Mr. Stavis increased his stake by 266.62% to 103,130 shares with this purchase.
- Director Gregory K. Peters acquired 72,358 shares, paying $13.95 per share for a total amount of $1.01 million. Mr. Peters increased his stake by 281.07% to 98,102 shares with this purchase.
You can view the list of recent insider transactions for 2U, Inc. here.
|P/E: N/A||Forward P/E: -16.48||Industry P/E: 23.84|
|P/S: 2||Price/Book: 1.11||EV/EBITDA: -33.15|
|Market Cap: $960.16M||Avg. Daily Volume: 2,231,642||52 Week Range: $11.37 – $90.31|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Amazon.com, Inc. (AMZN): $1807.58
Chairman, CEO and President Jeff Bezos sold 531,852 shares of Amazon for $1861.58, generating $990.09 million from the sale.
For a second week in a row, Mr. Bezos’ sales have topped our list of insider sales. He sold $1.84 billion worth of Amazon stock last week. These sales are significantly higher than his October 2018 sales when he sold just $33 million worth of stock.
You can view the list of recent insider transactions for Amazon.com, Inc. here.
|P/E: 74.99||Forward P/E: 54.41||Industry P/E: 24.52|
|P/S: 3.55||Price/Book: 16.83||EV/EBITDA: 27.92|
|Market Cap: $894.13B||Avg. Daily Volume: 3,779,487||52 Week Range: $1307 – $2050.5|
2. Facebook, Inc. (FB): $187.85
COB and CEO Mark Zuckerberg sold 368,550 shares of Facebook for $183.75, generating $67.72 million from the sale. These shares were sold indirectly by various entities.
You can view the list of recent insider transactions for Facebook, Inc. here.
|P/E: 31.77||Forward P/E: 19.75||Industry P/E: 40.18|
|P/S: 8.56||Price/Book: 6.04||EV/EBITDA: 18.77|
|Market Cap: $535.93B||Avg. Daily Volume: 16,945,996||52 Week Range: $123.02 – $208.66|
3. Garmin Ltd. (GRMN): $79.04
Executive Chairman Min H. Kao sold 844,738 shares of this GPS manufacturer for $75.95, generating $64.16 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: 20.38||Forward P/E: 19.52||Industry P/E: 34.8|
|P/S: 4.34||Price/Book: 3.62||EV/EBITDA: 15.08|
|Market Cap: $15.03B||Avg. Daily Volume: 1,145,923||52 Week Range: $59.98 – $89.72|
4. Meritage Homes Corporation (MTH): $62.33
Shares of this residential construction company were sold by 3 insiders:
- Chief Executive Officer Steven J. Hilton sold 579,026 shares for $63.00, generating $36.48 million from the sale. These shares were sold indirectly through a trust.
- Director Peter L. Ax sold 17,100 shares for $64.02, generating $1.09 million from the sale.
- Director Raymond Oppel sold 16,000 shares for $63.48, generating $1.02 million from the sale.
You can view the list of recent insider transactions for Meritage Homes Corporation here.
|P/E: 11.96||Forward P/E: 10.22||Industry P/E: 12.34|
|P/S: 0.69||Price/Book: 1.33||EV/EBITDA: 11.3|
|Market Cap: $2.39B||Avg. Daily Volume: 430,007||52 Week Range: $32.02 – $66.18|
5. Kratos Defense & Security Solutions, Inc. (KTOS): $18.94
Shares of this security & protection services provider were sold by 10 insiders:
- Director Bandel L. Carano sold 500,000 shares for $19.18, generating $9.59 million from the sale.
- EVP & CFO Deanna H. Lund sold 123,245 shares for $19.65, generating $2.42 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- President, STC Division Phillip D. Carrai sold 77,502 shares for $19.46, generating $1.51 million from the sale. 16,889 of these shares were sold as a result of exercising options immediately prior to the sale.
- President, DRSS Division David M. Carter sold 34,327 shares for $19.12, generating $656,393 from the sale. 13,711 of these shares were sold as a result of exercising options immediately prior to the sale.
- President, US Division Steven S. Fendley sold 30,000 shares for $19.07, generating $572,088 from the sale.
- SVP, Corp. Dev. & Gov. Affairs Benjamin M. Goodwin sold 18,700 shares for $20.12, generating $376,156 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- VP & Corporate Controller Maria Cervantes De Burgreen sold 16,128 shares for $19.46, generating $313,821 from the sale.
- VP & General Counsel Marie Mendoza sold 13,993 shares for $19.96, generating $279,249 from the sale.
- Director Amy Zegart sold 7,305 shares for $19.55, generating $142,794 from the sale.
- President, MS Division Thomas E. Mills sold 6,467 shares for $19.11, generating $123,602 from the sale.
You can view the list of recent insider transactions for Kratos Defense & Security Solutions, Inc. here.
|P/E: 160.51||Forward P/E: 38.65||Industry P/E: 42.51|
|P/S: 2.99||Price/Book: 3.59||EV/EBITDA: 36.9|
|Market Cap: $2.01B||Avg. Daily Volume: 1,441,723||52 Week Range: $11.91 – $25.08|
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.