Insider Weekends: Bill Greehey Buys $15 Million Worth of NuStar Energy

Welcome to edition 493 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $76.94 million of stock last week compared to $225.13 million in the week prior. Selling also decreased with insiders selling $1.57 billion of stock last week compared to $2.26 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 20.41. In other words, insiders sold almost 21 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 11.72.

Insider Sector Heat Map November 29, 2019

Insider Sector Heat Map November 29, 2019

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. NuStar Energy L.P. (NS): $28.22

Director William E. Greehey acquired 527,426 units of this oil & gas midstream company, paying $28.44 per share for a total amount of $14.99 million. Mr. Greehey increased his stake by 5.78% to 9,646,530 shares with this purchase.

William “Bill” Greehey is the founding Chairman and CEO of Valero Energy and held those roles for a period of over 25 years. He has been Executive Chairman of NuStar Energy L.P. and group since 2006. According to the company, NuStar “currently has approximately 9,900 miles of pipeline and 74 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. NuStar has been ranked as one of FORTUNE’s 100 Best Companies to Work For for 10 consecutive years”.

I have seen several insider purchases by Mr. Greehey over the years but this purchase stood out for a couple of reasons. This is his largest purchase in over two years and the last time he purchased this much was back in April 2017 when he purchased units at an average price of $46.35 as you can see here. The other reason the purchase stood out was because of all the insider buying by the insiders of Kinder Morgan we discussed last week.

The company is structured as a Master Limited Partnership and has a distribution yield of 8.5%. Because of its structure, you are going to get a K-1 from the company even if you hold the units in a retirement account. Kinder Morgan has a lower yield but is structured as a corporation. It was one of the first companies in the energy industry to favor the Master Limited Partnership (MLP) structure that allowed companies to pay no corporate taxes and pass all its profits to investors as distributions. More than four years ago, it was also one of the first to abandon the structure by merging its four pipeline companies into a single one and adopting a traditional C corporate structure.

You can view the list of recent insider transactions for NuStar Energy L.P. here.

P/E: N/A Forward P/E: 17.75 Industry P/E: 13.17
P/S: 1.6 Price/Book: 3 EV/EBITDA: 11.42
Market Cap: $3.06B Avg. Daily Volume: 510,300 52 Week Range: $19.81 – $30.06

2. Kinder Morgan, Inc. (KMI): $19.61

Executive Chairman Richard D. Kinder acquired 300,000 shares of this oil & gas midstream company, paying $19.74 per share for a total amount of $5.92 million. Mr. Kinder increased his stake by 0.12% to 243,079,496 shares with this purchase.

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

P/E: 21.6 Forward P/E: 19.04 Industry P/E: 13.17
P/S: 3.26 Price/Book: 1.32 EV/EBITDA: 12.98
Market Cap: $44.42B Avg. Daily Volume: 11,512,481 52 Week Range: $14.62 – $21.5

3. Forum Energy Technologies, Inc. (FET): $1.31

Shares of this oil & gas equipment & services company were acquired by 3 insiders:

  • Director David C. Baldwin acquired 585,938 shares, paying $1.28 per share for a total amount of $750,001. Mr. Baldwin increased his stake by 834.53% to 656,150 shares with this purchase.
  • CEO & COB C Christopher Gaut acquired 312,500 shares, paying $1.28 per share for a total amount of $400,000. Mr. Gaut increased his stake by 17.21% to 2,127,833 shares with this purchase.
  • Director Evelyn M. Angelle acquired 78,125 shares, paying $1.28 per share for a total amount of $100,000. Ms. Angelle increased her stake by 66.46% to 195,679 shares with this purchase.

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

P/E: N/A Forward P/E: -9.36 Industry P/E: N/A
P/S: 0.14 Price/Book: 0.3 EV/EBITDA: 15.3
Market Cap: $144.71M Avg. Daily Volume: 1,000,760 52 Week Range: $0.88 – $7

4. Expedia Group, Inc. (EXPE): $101.66

Director Samuel H. Altman acquired 20,000 shares of this online travel company, paying $98.83 per share for a total amount of $1.98 million. These shares were purchased indirectly by Altman Holdco, LLC.

Sam Altman is a Silicon Valley investor and entrepreneur who worked with the startup accelerator Y Combinator from 2014 to 2019 and left the company to start OpenAI. The group’s mission is “to ensure that artificial general intelligence benefits all of humanity” and it received an investment of $1 billion from Microsoft earlier this year.

Mr. Altman was appointed to Expedia’s board in September 2019 and since new directors often buy stock of the company, I would not read much into the purchase.

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

P/E: 30.44 Forward P/E: 14.63 Industry P/E: 44.54
P/S: 1.24 Price/Book: 3.54 EV/EBITDA: 12.34
Market Cap: $14.73B Avg. Daily Volume: 2,395,678 52 Week Range: $93.53 – $144

5. Assured Guaranty Ltd. (AGO): $49.65

Chief Investment Officer Andrew T. Feldstein acquired 38,340 shares of this insurance company, paying $49.09 per share for a total amount of $1.88 million. Mr. Feldstein increased his stake by 8.89% to 469,470 shares with this purchase.

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

P/E: 14.44 Forward P/E: 14.52 Industry P/E: 14.61
P/S: 5.2 Price/Book: 0.72 EV/EBITDA: N/A
Market Cap: $4.74B Avg. Daily Volume: 550,892 52 Week Range: $36.13 – $49.87

Notable Insider Sales:

1. Uber Technologies, Inc. (UBER): $29.6

Shares of this Uber were sold by 3 insiders:

  • Director Travis Cordell Kalanick sold 8,436,545 shares for $29.65, generating $250.12 million from the sale.
  • Director Garrett Camp sold 510,000 shares for $29.45, generating $15.02 million from the sale. These shares were sold indirectly by Expa-1, LLC.
  • Chief Product Officer Manik Gupta sold 32,431 shares for $30.00, generating $972,930 from the sale.

We wrote the following about an insider purchase by the CEO of Uber last week,

“Uber’s stock had recently been under pressure from heavy selling related to the expiry of the six month post-IPO lockup period. This purchase helped the stock register a gain of more 5% the day after it was filed. While the purchase appears to be an open market purchase (there were no footnotes in the filing to indicate otherwise), it was odd to see another insider sell the same number of shares at the same price on the same day as you can see below.

Mr. Khosrowshahi’s purchase is dwarfed by the nearly $750 million in sales by Uber’s founder Travis Kalanick in a single week.”

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

P/E: N/A Forward P/E: -12.54 Industry P/E: 37.89
P/S: 3.87 Price/Book: 3.35 EV/EBITDA: -5.79
Market Cap: $50.49B Avg. Daily Volume: 19,057,646 52 Week Range: $25.58 – $47.08

2. Copart, Inc. (CPRT): $89

Chief Executive Officer Jayson A. Adair sold 702,686 shares of this online auctions and vehicle remarketing services provider for $90.37, generating $63.5 million from the sale. These shares were sold indirectly by a trust.

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

P/E: 30.66 Forward P/E: 28.71 Industry P/E: 40.57
P/S: 9.69 Price/Book: 10.74 EV/EBITDA: 24.8
Market Cap: $20.69B Avg. Daily Volume: 1,648,301 52 Week Range: $44.61 – $92.41

3. The Charles Schwab Corporation (SCHW): $49.5

Shares of this investment brokerage were sold by 3 insiders:

  • Chairman Charles R. Schwab sold 600,000 shares for $49.39, generating $29.63 million from the sale. These shares were sold indirectly by a trust.
  • Director Arun Sarin sold 15,000 shares for $49.11, generating $736,587 from the sale. These shares were sold indirectly by a trust.
  • EVP and General Counsel Peter J. Morgan III sold 2,500 shares for $49.02, generating $122,547 from the sale.

You can view the list of recent insider transactions for The Charles Schwab Corporation here.

P/E: 18.27 Forward P/E: 19.88 Industry P/E: 17.71
P/S: 5.89 Price/Book: 3.44 EV/EBITDA: N/A
Market Cap: $63.47B Avg. Daily Volume: 9,847,748 52 Week Range: $34.58 – $50.97

4. Columbia Sportswear Company (COLM): $92.5

Director Sarah Bany sold 207,653 shares of this apparel manufacturing company for $91.48, generating $18.99 million from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for Columbia Sportswear Company here.

P/E: 19.32 Forward P/E: 18.14 Industry P/E: 28.46
P/S: 2.08 Price/Book: 3.58 EV/EBITDA: 12.61
Market Cap: $6.25B Avg. Daily Volume: 327,195 52 Week Range: $80.03 – $109.74

5. Inspire Medical Systems, Inc. (INSP): $70.96

Shares of this medical devices company were sold by 3 insiders:

  • Director Chau Quang Khuong sold 124,000 shares for $70.69, generating $8.77 million from the sale. These shares were sold indirectly by OrbiMed Private Investments.
  • Director Marilyn C. Nelson sold 44,000 shares for $68.74, generating $3.02 million from the sale. These shares were sold indirectly by GDN Holdings, LLC
  • Director Mudit K. Jain sold 3,677 shares for $69.82, generating $256,741 from the sale.

You can view the list of recent insider transactions for Inspire Medical Systems, Inc. here.

P/E: N/A Forward P/E: -45.2 Industry P/E: N/A
P/S: 23.81 Price/Book: 11.68 EV/EBITDA: -51.44
Market Cap: $1.71B Avg. Daily Volume: 252,725 52 Week Range: $35.43 – $72.31

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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