Insider Weekends: Insider Buying At A Potato Spin-Off From ConAgra Foods

Welcome to edition 499 of Insider Weekends. Insider buying decreased last week with insiders purchasing $7.49 million of stock compared to $16.77 million in the week prior. Selling on the other hand increased significantly with insiders selling $1.19 billion of stock last week compared to $433.74 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 went up to 158.33. In other words, insiders sold more than 158 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 25.86. 

Insider Sector Heat Map January 10, 2020

Insider Sector Heat Map January 10, 2020

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. Lamb Weston Holdings, Inc. (LW): $90.48

Chairman of the Board, William G. Jurgensen acquired 18,000 shares of this packaged foods company, paying $92.01 per share for a total amount of $1.66 million. Mr. Jurgensen increased his stake by 14.00% to 146,536 shares with this purchase.

It is a little surprising to come across a company that focuses almost exclusively on potato snacks that is worth over $13 billion and afforded a valuation of nearly 18 times EBITDA. If you have come across a bag of Yukon Gold potatoes, you are looking at a Lamb Weston product. From its humble beginnings in Oregon, the company now spans five continents and offers a large variety of fresh and frozen potato products. Idaho baed Lamb Weston was spun out of ConAgra Foods in November 2016.

The market is probably affording the company a rich valuation because revenue has been growing high single digits or double digits for the last eight quarters, the company sports net margins of nearly 13% and beats estimates on both the top and bottom lines.

This is the first insider purchase we have seen at the company over the last two years. Mr. Jurgensen has been on the board of the company since 2017.

You can view the list of recent insider transactions for Lamb Weston Holdings, Inc. here.

P/E: 26.23 Forward P/E: 24.06 Industry P/E: 47.41
P/S: 3.36 Price/Book: 65.71 EV/EBITDA: 17.75
Market Cap: $13.23B Avg. Daily Volume: 983,667 52 Week Range: $58.83 – $94.46

2. Mosaic Acquisition Corp. (MOSC): $10.2

President and CEO David M. Maura acquired 100,000 shares of this special purpose acquisition company (SPAC), paying $10.29 per share for a total amount of $1.03 million. Mr. Maura increased his stake by 29.84% to 435,066 shares with this purchase.

SPACs or blank check companies are publicly traded companies with no operations of their own. They are set up to find an operating business and eventually merge into that operating business. In this case Mosaic has identified Vivint Smart Home as the operating company it plans to merge into at a valuation of $4.1 billion or 7.75 times EBITDA.

Private equity firm The Blackstone Group had previously acquired Vivint for $2 billion in 2012.

You can view the list of recent insider transactions for Mosaic Acquisition Corp. here.

P/E: 85.71 Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: 87.93 EV/EBITDA: N/A
Market Cap: $439.87M Avg. Daily Volume: 387,140 52 Week Range: $9.26 – $10.71

3. Hersha Hospitality Trust (HT): $13.49

Shares of this hotel REIT were acquired by 2 insiders:

  • President and COO Neil H. Shah acquired 7,300 shares, paying $13.51 per share for a total amount of $98,629. Mr. Shah increased his stake by 2.06% to 361,686 shares with this purchase.
  • Chief Executive Officer Jay H. Shah acquired 7,300 shares, paying $13.51 per share for a total amount of $98,629. Mr. Shah increased his stake by 2.36% to 316,349 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: -30.66 Industry P/E: 36.88
P/S: 0.98 Price/Book: 0.63 EV/EBITDA: 12.16
Market Cap: $520.86M Avg. Daily Volume: 435,200 52 Week Range: $13 – $20.38

4. salesforce.com, inc. (CRM): $180.2

Director Susan Wojcicki acquired 1,100 shares of this software application company, paying $175.26 per share for a total amount of $192,788. Ms. Wojcicki increased her stake by 1.09% to 101,569 shares with this purchase.

You can view the list of recent insider transactions for salesforce.com, inc. here.

P/E: 201.12 Forward P/E: 58.13 Industry P/E: 46.99
P/S: 10.08 Price/Book: 4.8 EV/EBITDA: 67.08
Market Cap: $159.84B Avg. Daily Volume: 5,094,733 52 Week Range: $137.87 – $180.68

5. Amazon.com, Inc. (AMZN): $1883.16

Director Indra K. Nooyi acquired 100 shares of Amazon, paying $1875.00 per share for a total amount of $187,500. Ms. Nooyi increased her stake by 40% to 350 shares with this purchase.

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

P/E: 83.44 Forward P/E: 69.75 Industry P/E: 47.93
P/S: 3.5 Price/Book: 16.5 EV/EBITDA: 28.48
Market Cap: $928.31B Avg. Daily Volume: 3,089,041 52 Week Range: $1566.76 – $2035.8

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

Notable Insider Sales:

1. Uber Technologies, Inc. (UBER): $34.01

Director Garrett Camp sold 510,000 shares of Uber for $33.22, generating $16.94 million from the sale. These shares were sold indirectly by Expa-1, LLC.

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

P/E: N/A Forward P/E: -14.35 Industry P/E: 39.39
P/S: 4.6 Price/Book: 3.85 EV/EBITDA: -6.73
Market Cap: $59.99B Avg. Daily Volume: 28,191,100 52 Week Range: $25.58 – $47.08

2. TTEC Holdings, Inc. (TTEC): $40.08

Chairman & CEO Kenneth D. Tuchman sold 450,000 shares of this information technology company for $36.50, generating $16.43 million from the sale. These shares were sold indirectly by a trust.

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

P/E: 26.9 Forward P/E: 19.65 Industry P/E: 39.36
P/S: 1.16 Price/Book: 4.97 EV/EBITDA: 11.09
Market Cap: $1.86B Avg. Daily Volume: 217,064 52 Week Range: $30.53 – $50.45

3. Intercontinental Exchange, Inc. (ICE): $94.25

Shares of this regulated exchanges company were sold by 3 insiders:

  • Chief Executive Officer Jeffrey C. Sprecher sold 90,000 shares for $92.66, generating $8.34 million from the sale. 60,000 of these shares were sold indirectly by CPEX and 30,000 of these shares were sold indirectly by Mr. Sprecher’s spouse.
  • Chief Financial Officer Scott A. Hill sold 38,305 shares for $92.55, generating $3.54 million from the sale.
  • Chief Operating Officer Mark Wassersug sold 2,982 shares for $94.35, generating $281,363 from the sale.

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

P/E: 25.58 Forward P/E: 22.33 Industry P/E: 18.52
P/S: 9.98 Price/Book: 3.06 EV/EBITDA: 18.66
Market Cap: $52.02B Avg. Daily Volume: 2,462,290 52 Week Range: $71.9 – $95.56

4. CarGurus, Inc. (CARG): $35.18

CEO and Chairman Langley Steinert sold 233,868 shares of this online automotive marketplace company for $36.02, generating $8.42 million from the sale. 17,772 of these shares were sold indirectly through a trust.

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

P/E: 97.72 Forward P/E: 53.3 Industry P/E: 35.89
P/S: 7.12 Price/Book: 16.59 EV/EBITDA: 111.26
Market Cap: $3.96B Avg. Daily Volume: 881,330 52 Week Range: $28.65 – $45.25

5. RealPage, Inc. (RP): $56

Chairman President & CEO Stephen T. Winn sold 150,000 shares of this software application company for $55.10, generating $8.26 million from the sale. These shares were sold indirectly by Seren Capital Management, L.L.C.

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

P/E: 121.21 Forward P/E: 29.17 Industry P/E: 46.99
P/S: 5.6 Price/Book: 4.51 EV/EBITDA: 34.66
Market Cap: $5.37B Avg. Daily Volume: 614,230 52 Week Range: $51.65 – $65.92

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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