Welcome to edition 487 of Insider Weekends. Insider buying declined last week with insiders purchasing $37.67 million of stock last week compared to $42.92 million in the week prior. Selling on the other hand increased with insiders selling $469.25 million of stock last week compared to $348.05 million 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 increased to 12.46. 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 8.12.
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. Stitch Fix, Inc. (SFIX): $23.22
Director William J. Gurley acquired 150,000 shares of this online apparel, shoes, and accessories company, paying $20.83 per share for a total amount of $3.12 million. Mr. Gurley increased his stake by 27.55% to 694,507 shares with this purchase.
Stitch Fix is an online personal styling company where customers fill out a “style profile” and the company sends a customized shipment of clothes and accessories. Customers try out the assortment sent to them, keep what they like and send back the rest. In addition to the margins made on the clothes and accessories, the company also charges a $20 styling fee with each shipment.
When I first saw this purchase, I thought that Bill Gurley probably acquired the shares indirectly and that the actual investment was through San Francisco based venture capital firm Benchmark. Upon closer inspection of the form 4 filing it became evident that the purchase was a direct purchase and that partially explains the nearly 7% increase in Stitch Fix stock last week after this purchase was filed with the SEC.
Bill Gurley ranked third on Forbe’s Midas List for 2019 thanks to his successful investments in GrubHub, Nextdoor, Zillow, Stitch Fix and more notably Uber. When a successful venture capitalist with a CFA and a background that includes a four year stint on Wall Street as a research analyst purchases stock in a company that he has been involved with for several years, it piques my curiosity. This has been the only insider purchase at the company since it went public on November 17, 2017 at $15 per share.
Stitch Fix has had a tumultuous couple of years as a public company. While the company has grown revenue significantly over the last two years from $296 million in the quarter ended October 2017 to $432 million in its most recent fiscal Q4 2019 quarter ended July 2019, its stock has been hurt on account of competition from deep pocketed companies like Amazon and Nordstrom. It also happens to be one of the few E-commerce companies that happen to be consistently profitable with a cash rich balance sheet.
You can view the list of recent insider transactions for Stitch Fix, Inc. here.
|P/E: 65.22||Forward P/E: 116.1||Industry P/E: 46.19|
|P/S: 1.5||Price/Book: 5.95||EV/EBITDA: 50.33|
|Market Cap: $2.36B||Avg. Daily Volume: 3,005,346||52 Week Range: $16.05 – $37.72|
2. Assured Guaranty Ltd. (AGO): $46.83
Chief Investment Officer Andrew T. Feldstein acquired 58,300 shares of this insurance company, paying $45.83 per share for a total amount of $2.67 million. Mr. Feldstein increased his stake by 82.34% to 129,100 shares with this purchase.
We wrote the following about Mr. Feldstein’s purchase last week,
“These purchases appear to be related to Assured Guaranty’s $160 million purchase of the alternative asset management company Blue Mountain Capital Management that closed earlier this month. The first footnote of this form 4 filing states,
“The Reporting Person has agreed with the issuer to purchase Common Shares of the issuer during the two-month period ending November 30, 2019 for an aggregate purchase price of $22,500,000, representing a portion of the cash consideration he received in the acquisition of BlueMountain Capital Management, LLC and its associated entities by a subsidiary of the issuer.”
Mr. Feldstein also purchased 24,000 shares in the first week of October and we are likely to continue seeing purchases by him through the rest of this month and next month.”
You can view the list of recent insider transactions for Assured Guaranty Ltd. here.
|P/E: 11.11||Forward P/E: 14.02||Industry P/E: 14.74|
|P/S: 4.73||Price/Book: 0.7||EV/EBITDA: N/A|
|Market Cap: $4.62B||Avg. Daily Volume: 553,201||52 Week Range: $36.13 – $47.97|
3. Keurig Dr Pepper Inc. (KDP): $27.59
Chief Human Resources Officer Mary Beth Denooyer acquired 6,000 shares of this beverage company, paying $27.54 per share for a total amount of $165,251. Ms. Denooyer increased her stake by 11.11% to 60,000 shares with this purchase.
You can view the list of recent insider transactions for Keurig Dr Pepper Inc. here.
|P/E: 40.87||Forward P/E: 19.71||Industry P/E: 23.13|
|P/S: 3.57||Price/Book: 1.7||EV/EBITDA: 17.23|
|Market Cap: $38.81B||Avg. Daily Volume: 2,491,887||52 Week Range: $22.95 – $31.06|
4. Independence Contract Drilling, Inc. (ICD): $0.8267
Shares of this oil & gas drilling company were acquired by 4 insiders:
- Director Thomas R. Bates Jr. acquired 60,000 shares, paying $0.87 per share for a total amount of $51,996. Mr. Bates increased his stake by 39.71% to 211,110 shares with this purchase.
- EVP & CFO Philip A. Choyce acquired 36,801 shares, paying $0.87 per share for a total amount of $31,945. Mr. Choyce increased his stake by 6.34% to 617,534 shares with this purchase.
- President & CEO John A. Gallegos Jr. acquired 15,000 shares, paying $0.87 per share for a total amount of $13,102. Mr. Gallegos increased his stake by 3.17% to 488,710 shares with this purchase.
- SVP HR & HSE Travis Fitts acquired 7,500 shares, paying $0.86 per share for a total amount of $6,479. Mr. Fitts increased his stake by 6.15% to 129,451 shares with this purchase.
You can view the list of recent insider transactions for Independence Contract Drilling, Inc. here.
|P/E: N/A||Forward P/E: -3.31||Industry P/E: N/A|
|P/S: 0.31||Price/Book: 0.17||EV/EBITDA: 3.5|
|Market Cap: $63.61M||Avg. Daily Volume: 213,650||52 Week Range: $0.8 – $4.47|
5. Hersha Hospitality Trust (HT): $13.51
Shares of this hotel REIT were acquired by 2 insiders:
- Chief Executive Officer Jay H. Shah acquired 3,571 shares, paying $13.90 per share for a total amount of $49,653. Mr. Shah increased his stake by 1.20% to 301,771 shares with this purchase.
- President and COO Neil H. Shah acquired 3,571 shares, paying $13.90 per share for a total amount of $49,653. Mr. Shah increased his stake by 1.04% to 347,108 shares with this purchase.
You can view the list of recent insider transactions for Hersha Hospitality Trust here.
|P/E: N/A||Forward P/E: -29.37||Industry P/E: 32.31|
|P/S: 1.01||Price/Book: 0.63||EV/EBITDA: 12.2|
|Market Cap: $530.54M||Avg. Daily Volume: 389,307||52 Week Range: $13 – $20.38|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Facebook, Inc. (FB): $185.85
Shares of Facebook were sold by 2 insiders:
- COB and CEO Mark Zuckerberg sold 612,882 shares for $185.31, generating $113.57 million from the sale. These shares were sold indirectly through various entities.
- Chief Operating Officer Sheryl Sandberg sold 55,000 shares for $180.47, generating $9.93 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: 31.43||Forward P/E: 19.56||Industry P/E: 28.25|
|P/S: 8.47||Price/Book: 5.98||EV/EBITDA: 18.72|
|Market Cap: $530.22B||Avg. Daily Volume: 13,967,795||52 Week Range: $123.02 – $208.66|
2. JPMorgan Chase & Co. (JPM): $120.56
Shares of JPMorgan were sold by 2 insiders:
- Co-President & COO, CEO CCB Gordon Smith sold 83,289 shares for $119.98, generating $9.99 million from the sale.
- Co-President & COO, CEO CIB Daniel E. Pinto sold 53,000 shares for $120.51, generating $6.39 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for JPMorgan Chase & Co. here.
|P/E: 11.9||Forward P/E: 11.49||Industry P/E: 10.43|
|P/S: 3.52||Price/Book: 1.63||EV/EBITDA: N/A|
|Market Cap: $378.14B||Avg. Daily Volume: 11,455,093||52 Week Range: $91.11 – $121.59|
3. Garmin Ltd. (GRMN): $87.46
Executive Chairman Min H. Kao sold 183,576 shares of this GPS manufacturer for $87.36, generating $16.04 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: 22.55||Forward P/E: 21.38||Industry P/E: 27.41|
|P/S: 4.8||Price/Book: 4.01||EV/EBITDA: 16.84|
|Market Cap: $16.63B||Avg. Daily Volume: 1,077,127||52 Week Range: $59.98 – $89.72|
4. ServiceNow, Inc. (NOW): $243
Shares of this cloud software company were sold by 2 insiders:
- Director Frederic B. Luddy sold 22,000 shares for $269.37, generating $5.93 million from the sale. These shares were sold indirectly through a trust.
- Chief Product Officer Chirantan Jitendra Desai sold 1,563 shares for $270.07, generating $422,119 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 ServiceNow, Inc. here.
|P/E: 16200||Forward P/E: 56.64||Industry P/E: 41.52|
|P/S: 15.13||Price/Book: 36.13||EV/EBITDA: 286.13|
|Market Cap: $45.56B||Avg. Daily Volume: 1,842,424||52 Week Range: $147.63 – $303.17|
5. Workday, Inc. (WDAY): $154.54
Shares of this cloud enterprise software company were sold by 6 insiders:
- Co-President & CFO Robynne Sisco sold 10,238 shares for $182.42, generating $1.87 million from the sale.
- Chief Products Officer Petros Dermetzis sold 7,171 shares for $183.28, generating $1.31 million from the sale.
- Chief Executive Officer Aneel Bhusri sold 6,355 shares for $184.02, generating $1.17 million from the sale.
- COO & Executive Vice President James Bozzini sold 4,972 shares for $183.92, generating $914,435 from the sale.
- Co-President Gomez Luciano Fernandez sold 4,327 shares for $182.94, generating $791,560 from the sale.
- Director David A. Duffield sold 271 shares for $184.71, generating $50,057 from the sale.
You can view the list of recent insider transactions for Workday, Inc. here.
|P/E: N/A||Forward P/E: 69.61||Industry P/E: 41.52|
|P/S: 10.86||Price/Book: 15.94||EV/EBITDA: -130.32|
|Market Cap: $35.24B||Avg. Daily Volume: 2,088,060||52 Week Range: $117.72 – $226.83|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Workday (WDAY). 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.