Welcome to edition 491 of Insider Weekends. Insider buying more than doubled last week with insiders purchasing $134.86 million of stock last week compared to $62.59 million in the week prior. Selling decreased with insiders selling $1.58 billion of stock last week compared to $2.51 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 dropped to 11.72. In other words, insiders sold almost 12 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 40.08.
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. Dropbox, Inc. (DBX): $19.21
Chief Executive Officer Andrew Houston acquired 500,000 shares of Dropbox, paying $19.14 per share for a total amount of $9.57 million. These shares were purchased indirectly through a trust.
Online file storage with multi-user access, versioning and sync to local devices was a ground breaking area when Box (BOX) was founded in 2005 and Dropbox (DBX) in 2007. I’ve used Dropbox for the better part of a decade but increasingly find myself using Google Drive, Microsoft’s OneDrive or Box. The differentiation in online storage has narrowed as giant’s like Google and Microsoft launched competing products that were tightly integrated into their ecosystem.
It is not surprising to see both Box and Dropbox’s revenue growth rates drop below Google’s 20% growth rate and hover just marginally above Microsoft’s 13.65% growth rate in fiscal Q1 2020. The market shares these concerns and the shift in preferences is reflected in the stock of both Box and Dropbox as you can see from the 1 year chart below.
Box with its focus on business and compliance focused solutions (HIPAA for healthcare for example) has been hurt less than Dropbox but both companies face the same competitive pressures that will make growth challenging unless they move aggressively into adjacent markets. While Dropbox Spaces and the ability to send large files (as much as 100 GB) are nice touches, the company needs wholesale innovation on the product front or needs to acquire that growth the way Twilio (TWLO) did with SendGrid.
This is the first insider purchase at Dropbox since the company went public in March 2018 at $21 per share. While this purchase by the CEO is positive, it is not enough to get me interested in the company, especially since the CFO and CTO are still selling.
You can view the list of recent insider transactions for Dropbox, Inc. here.
|P/E: N/A||Forward P/E: 33.12||Industry P/E: 44.03|
|P/S: 5.01||Price/Book: 10.46||EV/EBITDA: 84.58|
|Market Cap: $7.98B||Avg. Daily Volume: 3,221,053||52 Week Range: $17.2 – $26.49|
2. UGI Corporation (UGI): $43.19
Shares of this diversified energy storage and distribution company were acquired by 2 insiders:
- Director Frank S. Hermance acquired 150,000 shares, paying $42.70 per share for a total amount of $6.4 million. Mr. Hermance increased his stake by 60.00% to 400,000 shares with this purchase.
- EVP, Global LPG Roger Perreault acquired 2,357 shares, paying $42.45 per share for a total amount of $100,061. Mr. Perreault increased his stake by 10.19% to 25,481 shares with this purchase.
You can view the list of recent insider transactions for UGI Corporation here.
|P/E: 30.63||Forward P/E: 14.07||Industry P/E: 17.80|
|P/S: 1.23||Price/Book: 1.97||EV/EBITDA: 11.05|
|Market Cap: $9.02B||Avg. Daily Volume: 1,832,918||52 Week Range: $40.52 – $59.31|
3. Kinder Morgan, Inc. (KMI): $20.44
Executive Chairman Richard D. Kinder acquired 300,000 shares of this oil & gas pipelines company, paying $19.97 per share for a total amount of $5.99 million. Mr. Kinder increased his stake by 0.12% to 242,779,496 shares with this purchase.
We wrote the following about Kinder Morgan a couple of weeks ago after Mr. Kinder acquired 600,000 shares of the company,
Mr. Kinder has been active buyer of Kinder Morgan every time the stock has dipped to around $20 or below. The stock was below $20 for the first half of this year and he was a very active buyer then. He also purchased 700,000 shares for $13.91 million in late August.
Revenue has declined in each of the last two quarters and the company missed both top line and bottom line estimates. After cutting its dividend in 2016, the company is once again growing its dividend payout and the annual payout now is $1, translating to a 4.88% yield at a 103% payout ratio.
You can view the list of recent insider transactions for Kinder Morgan, Inc. here.
|P/E: 22.51||Forward P/E: 19.84||Industry P/E: 13.50|
|P/S: 3.39||Price/Book: 1.38||EV/EBITDA: 13.28|
|Market Cap: $46.3B||Avg. Daily Volume: 11,492,853||52 Week Range: $14.62 – $21.5|
4. Assured Guaranty Ltd. (AGO): $48.31
Chief Investment Officer Andrew T. Feldstein acquired 62,309 shares of this insurance company, paying $48.28 per share for a total amount of $3 million. Mr. Feldstein increased his stake by 21.30% to 354,788 shares with this purchase.
You can view the list of recent insider transactions for Assured Guaranty Ltd. here.
|P/E: 14.05||Forward P/E: 14.17||Industry P/E: 14.71|
|P/S: 5.06||Price/Book: 0.7||EV/EBITDA: N/A|
|Market Cap: $4.61B||Avg. Daily Volume: 556,035||52 Week Range: $36.13 – $49.86|
5. The Simply Good Foods Company (SMPL): $26.04
Shares of this branded nutritional foods and snack products were acquired by 2 insiders:
- Director James M. Kilts acquired 70,313 shares, paying $24.62 per share for a total amount of $1.73 million. Mr. Kilts increased his stake by 10.54% to 737,217 shares with this purchase. These shares were acquired though a privately negotiated transaction with Conyers Park Sponsor LLC.
- CEO and President Joseph Scalzo acquired 16,330 shares, paying $24.42 per share for a total amount of $398,779. Mr. Scalzo increased his stake by 3.63% to 465,683 shares with this purchase.
You can view the list of recent insider transactions for The Simply Good Foods Company here.
|P/E: 46.5||Forward P/E: 27.41||Industry P/E: 47.63|
|P/S: 4.74||Price/Book: 2.55||EV/EBITDA: 26.24|
|Market Cap: $2.48B||Avg. Daily Volume: 1,005,773||52 Week Range: $16.55 – $31.34|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Uber Technologies, Inc. (UBER): $26.79
Shares of Uber were sold by 2 insiders:
- Director Travis Cordell Kalanick sold 6,086,777 shares for $26.94, generating $163.99 million from the sale.
- Director Garrett Camp sold 510,000 shares for $26.55, generating $13.54 million from the sale.
With the six month post-IPO lockup period expiring at Uber, it is not surprising to see insiders have started selling shares and this is likely to continue for several weeks.
You can view the list of recent insider transactions for Uber Technologies, Inc. here.
|P/E: N/A||Forward P/E: -11.12||Industry P/E: 36.78|
|P/S: 3.5||Price/Book: 3.03||EV/EBITDA: -5.19|
|Market Cap: $45.7B||Avg. Daily Volume: 15,238,110||52 Week Range: $25.58 – $47.08|
2. The Blackstone Group Inc. (BX): $52.52
Executive Vice Chairman Hamilton E. James sold 946,300 shares of this asset management company for $51.87, generating $49.09 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: 95.32||Forward P/E: 17.22||Industry P/E: 17.20|
|P/S: 11.31||Price/Book: 5.29||EV/EBITDA: N/A|
|Market Cap: $62.99B||Avg. Daily Volume: 6,274,883||52 Week Range: $26.88 – $55.17|
3. NVR, Inc. (NVR): $3595.17
Shares of this residential construction company were sold by 2 insiders:
- Director Dwight C. Schar sold 11,393 shares for $3422.58, generating $38.99 million from the sale.
- President of Homebuilding Ops Jeffrey D. Martchek sold 1,818 shares for $3603.12, generating $6.55 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 NVR, Inc. here.
|P/E: 16.7||Forward P/E: 15.89||Industry P/E: 18.64|
|P/S: 1.79||Price/Book: 5.61||EV/EBITDA: 12.18|
|Market Cap: $13.28B||Avg. Daily Volume: 40,155||52 Week Range: $2285 – $3946.5|
4. Facebook, Inc. (FB): $195.1
COB and CEO Mark Zuckerberg sold 236,200 shares of Facebook for $191.25, generating $45.17 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: 31.19||Forward P/E: 21.28||Industry P/E: 32.64|
|P/S: 8.36||Price/Book: 5.92||EV/EBITDA: 18.04|
|Market Cap: $556.38B||Avg. Daily Volume: 13,139,761||52 Week Range: $123.02 – $208.66|
5. The PNC Financial Services Group, Inc. (PNC): $150.86
Shares of this regional bank were sold by 3 insiders:
- President/CEO William S. Demchak sold 129,400 shares for $152.10, generating $19.68 million from the sale.
- General Counsel and CAO Gregory B. Jordan sold 9,500 shares for $152.50, generating $1.45 million from the sale.
- Executive Vice President Karen L. Larrimer sold 2,000 shares for $152.29, generating $304,579 from the sale.
You can view the list of recent insider transactions for The PNC Financial Services Group, Inc. here.
|P/E: 13.52||Forward P/E: 12.83||Industry P/E: 11.11|
|P/S: 3.92||Price/Book: 1.46||EV/EBITDA: N/A|
|Market Cap: $66.1B||Avg. Daily Volume: 1,821,353||52 Week Range: $108.45 – $154.75|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Twilio (TWLO). 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.