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:
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:
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:
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:
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:
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.
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