Insider Weekends: Another Director Purchases Over $10 Million Of Liberty Latin America

Welcome to edition 490 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $62.59 million of stock last week compared to $206.8 million in the week prior. Selling on the other hand almost doubled with insiders selling $2.51 billion of stock last week compared to $1.29 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 40.08. In other words, insiders sold more than 40 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 6.24.

Insider Sector Heat Map November 8, 2019

Insider Sector Heat Map November 8, 2019 (click to enlarge)

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): $18.21

Director Brendan J. Paddick acquired 544,064 shares of this telecommunications services provider, paying $18.91 per share for a total amount of $10.29 million. Mr. Paddick increased his stake by 72.01% to 1,299,593 shares with this purchase.

Mr. Paddick is the CEO of private equity firm Columbus Capital and was previously the founder and CEO of Columbus International, a tele­communications company, which operated in over 42 countries in the greater Caribbean, Central American and Andean region. Columbus International merged with Cable & Wireless Communications in 2015 and the combined company was then acquired by Liberty Global in 2016. He has served on the board of LILA since January 2018.

He has exercised options of LILA several times since July 2018 without selling them and this is first open market purchase of LILA. We wrote the following about LILA earlier this year after another Director Eric Zinterhofer purchased nearly $20 million worth of stock,

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: 1821 Industry P/E: 16.14
P/S: 0.86 Price/Book: 1.09 EV/EBITDA: 7.35
Market Cap: $3.31B Avg. Daily Volume: 193,564 52 Week Range: $13.96 – $21.895

2. Assured Guaranty Ltd. (AGO): $48.23

Chief Investment Officer Andrew T. Feldstein acquired 48,279 shares of this insurance company, paying $47.71 per share for a total amount of $2.3 million. Mr. Feldstein increased his stake by 19.77% to 292,479 shares with this purchase.

You can view the list of recent insider transactions for Assured Guaranty Ltd. here.

P/E: 14.03 Forward P/E: 14.44 Industry P/E: 14.65
P/S: 5.17 Price/Book: 0.7 EV/EBITDA: N/A
Market Cap: $4.76B Avg. Daily Volume: 559,236 52 Week Range: $36.13 – $49.86

3. Luminex Corporation (LMNX): $18.365

Director Walter G. Loewenbaum II acquired 81,657 shares of this medical instruments & supplies company, paying $18.00 per share for a total amount of $1,469,432. Mr. Loewenbaum increased his stake by 16.40% to 579,551 shares with this purchase.

You can view the list of recent insider transactions for Luminex Corporation here.

P/E: N/A Forward P/E: 612.17 Industry P/E: 41.74
P/S: 2.37 Price/Book: 1.77 EV/EBITDA: 46.67
Market Cap: $771.09M Avg. Daily Volume: 177,875 52 Week Range: $17.35 – $30.16

4. Tile Shop Holdings, Inc. (TTS): $1.46

Director Peter Kamin acquired 799,490 shares of this home improvement products retailer, paying $1.65 per share for a total amount of $1.32 million. Mr. Kamin increased his stake by 32.58% to 3,253,394 shares with this purchase. 361,402 of these shares were purchased indirectly by various trusts and entities.

You can view the list of recent insider transactions for Tile Shop Holdings, Inc. here.

P/E: N/A Forward P/E: 29.2 Industry P/E: N/A
P/S: 0.21 Price/Book: 0.55 EV/EBITDA: 8.49
Market Cap: $74.29M Avg. Daily Volume: 1,342,095 52 Week Range: $1 – $7.99

5. Biglari Holdings Inc. (BH): $107.1

Chairman and CEO Sardar Biglari, acquired 1,971 shares of this holding company, paying $511.47 per share for a total amount of $1.01 million.

Unlike most purchases filed by Mr. Biglari that are indirect purchases by either the Lion Fund or Biglari Capital, this time he bought these shares directly for his own account.

You can view the list of recent insider transactions for Biglari Holdings Inc. here.

P/E: 0.5 Forward P/E: -14.38 Industry P/E: N/A
P/S: 0.48 Price/Book: 0.11 EV/EBITDA: 16.25
Market Cap: $337.65M Avg. Daily Volume: 11,429 52 Week Range: $80.9 – $165.65

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

Notable Insider Sales:

1. Uber Technologies, Inc. (UBER): $27.01

Shares of Uber were sold by 2 insiders:

  • Director Travis Cordell Kalanick sold 20,264,846 shares for $26.99, generating $546.89 million from the sale. These shares were sold indirectly by TCK Five-Year CRUT .
  • Chief Product Officer Manik Gupta sold 15,188 shares for $26.83, generating $407,457 from the sale.

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

P/E: N/A Forward P/E: -11.21 Industry P/E: 36.98
P/S: 3.53 Price/Book: 3.06 EV/EBITDA: -5.24
Market Cap: $46.07B Avg. Daily Volume: 14,208,360 52 Week Range: $25.58 – $47.08

2. Facebook, Inc. (FB): $190.84

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 645,037 shares for $193.63, generating $124.9 million from the sale. These shares were sold indirectly by various entities.
  • Chief Revenue Officer David B. Fischer sold 5,562 shares for $196.60, generating $1.09 million from the sale.

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

P/E: 30.51 Forward P/E: 20.79 Industry P/E: 30.56
P/S: 8.18 Price/Book: 5.79 EV/EBITDA: 17.62
Market Cap: $544.23B Avg. Daily Volume: 13,289,446 52 Week Range: $123.02 – $208.66

3. Cimpress N.V. (CMPR): $136.57

Director Scott J. Vassalluzzo sold 750,000 shares of this business services company (operator of Vistaprint) for $135.00, generating $101.25 million from the sale. These shares were sold indirectly by various entities.

You can view the list of recent insider transactions for Cimpress N.V. here.

P/E: 33.26 Forward P/E: 31.47 Industry P/E: 41.10
P/S: 1.33 Price/Book: N/A EV/EBITDA: 14.76
Market Cap: $3.71B Avg. Daily Volume: 232,920 52 Week Range: $73.74 – $141.26

4. Garmin Ltd. (GRMN): $95.89

Executive Chairman Min H. Kao sold 986,080 shares of this GPS manufacturer for $93.78, generating $92.47 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: 23.39 Forward P/E: 22.3 Industry P/E: 18.50
P/S: 5.08 Price/Book: 4.16 EV/EBITDA: 17.11
Market Cap: $18.23B Avg. Daily Volume: 988,610 52 Week Range: $59.98 – $96.44

5. The Blackstone Group Inc. (BX): $51.53

Executive Vice Chairman Hamilton E. James sold 553,700 shares of this asset management company for $51.77, generating $28.66 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for The Blackstone Group Inc. here.

P/E: 22.08 Forward P/E: 16.9 Industry P/E: 17.27
P/S: 11.1 Price/Book: 5.11 EV/EBITDA: N/A
Market Cap: $61.83B Avg. Daily Volume: 6,391,850 52 Week Range: $26.88 – $55.17

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: 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.

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