Welcome to edition 502 of Insider Weekends. Insider buying increased last week with insiders purchasing $31.09 million of stock compared to $11.65 million in the week prior. Selling also increased with insiders selling $614.24 million of stock last week compared to $569.34 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 dropped to 19.75. In other words, insiders sold almost 20 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 48.89.
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. Anthem, Inc. (ANTM): $265.28
President and CEO Gail Boudreaux acquired 7,600 shares of this health insurer, paying $263.70 per share for a total amount of $2 million. Ms. Boudreaux increased her stake by 40.09% to 26,556 shares with this purchase.
This is the first insider purchase we have seen at Anthem since 2011, when an EVP filed a small $13,859 purchase made in 2010.
Ms. Boudreaux joined Anthem in November 2017 after serving as the CEO of the UnitedHealthcare division of UnitedHealth Group (UNH) from January 2011 through November 2014. She stepped down as the CEO of UnitedHealthcare and started her own healthcare consulting company GKB Global Health, LLC. She also spent 20 years at the health insurer Aetna.
Over the last year Anthem has been the worst performing large health insurer with the stock down nearly 13%, underperforming the S&P 500 by 31%. As you can see from the chart below, its peers haven’t done much better either with Humana performing the best. I have included CVS in this chart because it acquired Aetna in November 2018 and Cigna (CI) is the “New Cigna” after it merged with Express Scripts in December 2018.
I can see why Ms. Boudreaux is feeling bullish about the stock after the recent pullback. The company grew both its top line and bottom line by double digits in each of the last three quarters and barring UnitedHealth Group, sports the best operating margins amongst its peer group. The stock is trading close to 12 times EBITDA and appears to be reasonably valued. The key large risks the company faces this year is the spread of Novel Coronovirus and a potential political changes later this year.
You can view the list of recent insider transactions for Anthem, Inc. here.
|P/E: 14.37||Forward P/E: 10.26||Industry P/E: 26.12|
|P/S: 0.65||Price/Book: 2.16||EV/EBITDA: 11.82|
|Market Cap: $67.27B||Avg. Daily Volume: 1,419,291||52 Week Range: $227.16 – $317.99|
2. Discover Financial Services (DFS): $75.13
Shares of this credit card and financial services company were acquired by 4 insiders:
- CEO and President Roger C. Hochschild acquired 15,000 shares, paying $74.12 per share for a total amount of $1.11 million. Mr. Hochschild increased his stake by 1.80% to 849,085 shares with this purchase.
- EVP, Chief Legal Officer & GC Wanjiku Juanita Walcott acquired 3,400 shares, paying $73.95 per share for a total amount of $251,430. Mr. Walcott increased his stake by 3.87% to 91,149 shares with this purchase.
- EVP & Chief Financial Officer John Greene acquired 3,377 shares, paying $73.84 per share for a total amount of $249,343. Mr. Greene increased his stake by 14.00% to 27,502 shares with this purchase.
- EVP, Pres. – Consumer Banking Carlos Minetti acquired 3,000 shares, paying $73.74 per share for a total amount of $221,206. Mr. Minetti increased his stake by 1.98% to 154,171 shares with this purchase.
You can view the list of recent insider transactions for Discover Financial Services here.
|P/E: 8.27||Forward P/E: 7.75||Industry P/E: 9.68|
|P/S: 2.29||Price/Book: 1.96||EV/EBITDA: N/A|
|Market Cap: $23.29B||Avg. Daily Volume: 1,811,077||52 Week Range: $67.44 – $92.98|
3. B. Riley Principal Merger Corp. (BRPM): $10.24
Director Bryant R. Riley acquired 84,430 shares of this special purpose acquisition company (SPAC), paying $10.21 per share for a total amount of $861,982.
31,038 of these shares were purchased indirectly by Mr. Riley as UTMA custodian for his children.
SPACs or blank check companies are publicly traded companies with no operations of their own. BRPM went public at $10 a share last year and in December 2019 indicated its plan to merge with an operating company called Alta Equipment Holdings, Inc with an anticipated pro forma enterprise value of approximately $550 million.
The merger is expected to close in Q1 2020 and at that time BRPM will assume the name Alta Equipment Group Inc. under the new ticker symbol “ALTG”.
You can view the list of recent insider transactions for B. Riley Principal Merger Corp. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: N/A||Price/Book: 8.19||EV/EBITDA: N/A|
|Market Cap: $188.74M||Avg. Daily Volume: 253,804||52 Week Range: $9.674 – $10.54|
4. Freeport-McMoRan Inc. (FCX): $11.1
Director John Joseph Stephens acquired 45,000 shares of this mining company, paying $11.19 per share for a total amount of $503,550. These shares were purchased indirectly by a Limited Partnership.
You can view the list of recent insider transactions for Freeport-McMoRan Inc. here.
|P/E: N/A||Forward P/E: 9.41||Industry P/E: 19.67|
|P/S: 1.12||Price/Book: 1.73||EV/EBITDA: 17.16|
|Market Cap: $16.11B||Avg. Daily Volume: 23,164,491||52 Week Range: $8.43 – $14.68|
5. Cadence Bancorporation (CADE): $15.63
Shares of this regional bank were acquired by 2 insiders:
- Director Marc J. Shapiro acquired 25,000 shares, paying $16.13 per share for a total amount of $403,250.
- Director Joseph W. Evans acquired 5,000 shares, paying $16.06 per share for a total amount of $80,282. Mr. Evans increased his stake by 1.31% to 386,229 shares with this purchase.
You can view the list of recent insider transactions for Cadence Bancorporation here.
|P/E: 10.02||Forward P/E: 8.1||Industry P/E: 10.84|
|P/S: 2.97||Price/Book: 0.81||EV/EBITDA: N/A|
|Market Cap: $1.99B||Avg. Daily Volume: 1,416,366||52 Week Range: $14.66 – $23.22|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. BlackRock, Inc. (BLK): $527.35
Shares of this asset management company were sold by 2 insiders:
- Chairman and CEO Laurence Fink sold 46,730 shares for $536.74, generating $25.08 million from the sale.
- Senior Managing Director Mark McCombe sold 1,336 shares for $534.05, generating $713,489 from the sale.
You can view the list of recent insider transactions for BlackRock, Inc. here.
|P/E: 18.55||Forward P/E: 15.28||Industry P/E: 17.58|
|P/S: 5.63||Price/Book: 2.53||EV/EBITDA: 13.75|
|Market Cap: $81.92B||Avg. Daily Volume: 503,706||52 Week Range: $403.54 – $547.35|
2. Lockheed Martin Corporation (LMT): $428.12
Shares of this security and aerospace company were sold by 6 insiders:
- Chairman, Pres. & CEO Marillyn A. Hewson sold 22,000 shares for $436.12, generating $9.59 million from the sale.
- Executive Vice President Michele A. Evans sold 9,629 shares for $432.22, generating $4.16 million from the sale. 8,360 of these shares were sold as a result of exercising options immediately prior to the sale.
- Executive Vice President Richard F. Ambrose sold 6,905 shares for $435.52, generating $3.01 million from the sale.
- SVP & General Counsel Maryanne Lavan sold 6,500 shares for $435.60, generating $2.83 million from the sale.
- Executive Vice President Scott T. Greene sold 2,000 shares for $432.88, generating $865,751 from the sale.
- VP & Controller Brian P. Colan sold 1,108 shares for $434.77, generating $481,725 from the sale.
You can view the list of recent insider transactions for Lockheed Martin Corporation here.
|P/E: 19.5||Forward P/E: 16.13||Industry P/E: 30.28|
|P/S: 2.02||Price/Book: 38.33||EV/EBITDA: 14.57|
|Market Cap: $120.76B||Avg. Daily Volume: 1,089,969||52 Week Range: $290.11 – $438.99|
3. Lennar Corporation (LEN): $666.36
Director Scott D. Stowell sold 300,000 shares of this financial services company for $67.20, generating $20.16 million from the sale.
You can view the list of recent insider transactions for Lennar Corporation here.
|P/E: 11/55||Forward P/E: 9.88||Industry P/E: 19.24|
|P/S: 0.92||Price/Book: 1.31||EV/EBITDA: 11.40|
|Market Cap: $20.44B||Avg. Daily Volume: 3,335,153||52 Week Range: $44.84 – $68.59|
4. JPMorgan Chase & Co. (JPM): $132.36
CEO Commercial Banking Douglas B. Petno sold 62,085 shares of this financial services company for $131.94, generating $8.19 million from the sale.
You can view the list of recent insider transactions for JPMorgan Chase & Co. here.
|P/E: 12.35||Forward P/E: 11.46||Industry P/E: 10.84|
|P/S: 3.71||Price/Book: 1.77||EV/EBITDA: N/A|
|Market Cap: $408.2B||Avg. Daily Volume: 10,517,703||52 Week Range: $98.09 – $141.1|
5. Datadog, Inc. (DDOG): $46.21
Shares of this software application company were sold by 2 insiders:
- General Counsel Laszlo Kopits sold 100,000 shares for $40.65, generating $4.07 million from the sale.
- Director Michael James Callahan sold 78,000 shares for $40.74, generating $3.18 million from the sale.
You can view the list of recent insider transactions for Datadog, Inc. here.
|P/E: N/A||Forward P/E: -462.1||Industry P/E: 45.40|
|P/S: 43.99||Price/Book: 17.72||EV/EBITDA: -945.07|
|Market Cap: $13.67B||Avg. Daily Volume: 2,361,709||52 Week Range: $27.55 – $47.26|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Freeport-McMoRan (FCX). 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.