Insider Weekends: Harold Hamm Buys More Of Continental Resources

Welcome to edition 523 of Insider Weekends. Insider buying more than doubled last week with insiders purchasing $286.95 million of stock compared to $123.37 million in the week prior even as the S&P 500 declined nearly 3% for the week. The large spike in COVID-19 cases in both Texas and Florida caught the attention of investors and weakened investor appetite for stocks. With volatility high, the premium on options is elevated and I decided not to buy put options on the S&P 500 as I have done in the past but decided to scale back on some investments on the long side.

Selling also increased with insiders selling $2.21 billion of stock last week compared to $1.28 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 7.69. In other words, insiders sold almost 8 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 10.39. 

Insider Sector Heat Map June 26, 2020

Insider Sector Heat Map June 26, 2020 (click to enlarge)

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. Continental Resources, Inc. (CLR): $15.1

Executive Chairman Harold Hamm acquired 3,436,264 shares of this oil and natural gas exploration and production company, paying $16.62 per share for a total amount of $57.12 million. Mr. Hamm increased his stake by 197.24% to 5,178,395 shares with this purchase.

It has been over a year since Harold Hamm purchased shares of Continental Resources and this is his largest purchase yet. We wrote the following about his purchases in March 2019 at significantly higher prices,

Harold Hamm suffered a double whammy over the last few years where declining oil prices significantly decreased the value of his holdings in Continental Resources, a company he founded in 1967 at the age of 21, and an expensive divorce with his wife of 26 years that required him to pay just under $1 billion as detailed in this Forbes article.

As you can see here, he made several insider purchases of CLR over the years but this is his largest purchase since we started tracking insider data in 2010.

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

P/E: 13.93 Forward P/E: -83.89 Industry P/E: N/A
P/S: 1.38 Price/Book: 0.85 EV/EBITDA: 3.8
Market Cap: $5.51B Avg. Daily Volume: 6,236,184 52 Week Range: $6.9 – $43.57

2. AXIS Capital Holdings Limited (AXS): $39.69

Director Charles A. Davis acquired 575,000 shares of this insurance company, paying $42.61 per share for a total amount of $24.5 million. These shares were purchased indirectly by Trident Capital.

This is the second week is a row AXIS Capital made our list of top 5 purchases. We wrote the following about Mr. Davis and AXIS Capital last week,

Mr. Davis has been on AXIS Capital’s Board of Directors since the company’s inception in 2001. He is also the CEO of Stone Point Capital, a firm that raised its eighth private equity fund, Trident VIII, with $7 billion in total commitment. Before Stone Point, Mr. Davis was a partner at Goldman Sachs for 23 years.

He purchased 25,000 shares at an average price of $49.90 on Feb 28, 2018 for $1.25 million and then nearly two years later purchased nearly $20 million worth of stock in March 2020. This latest group of purchases are his biggest purchases of AXIS Capital stock as you can see here.

AXIS Capital operates in the insurance and reinsurance sectors and as one would expect was impacted by the COVID-19 situation. The company reported a large loss of $1.94 per share on revenue of $1.68 billion in Q1 2020 but Mr. Davis probably sees opportunity in a sector most others perceive as troubled.

You can view the list of recent insider transactions for AXIS Capital Holdings Limited here.

P/E: N/A Forward P/E: 8.15 Industry P/E: 10.78
P/S: 0.67 Price/Book: 0.78 EV/EBITDA: 37.18
Market Cap: $3.35B Avg. Daily Volume: 960,510 52 Week Range: $31.82 – $67.51

3. Groupon, Inc. (GRPN): $18.69

Director Eric P. Lefkofsky acquired 250,000 shares of Groupon, paying $21.57 per share for a total amount of $5.39 million. These shares were purchased indirectly by Green Media, LLC.

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

P/E: N/A Forward P/E: -69.22 Industry P/E: 70.28
P/S: 0.27 Price/Book: 2.78 EV/EBITDA: 20.92
Market Cap: $535.2M Avg. Daily Volume: 1,251,429 52 Week Range: $9.6 – $73

4. Ardelyx, Inc. (ARDX): $6.39

Director David M. Mott acquired 145,644 shares of this biopharmaceutical company, paying $6.85 per share for a total amount of $997,427. Mr. Mott increased his stake by 143.29% to 247,284 shares with this purchase.

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

P/E: N/A Forward P/E: -5.92 Industry P/E: 1,524.03
P/S: 87.63 Price/Book: 3.39 EV/EBITDA: -4.7
Market Cap: $569.07M Avg. Daily Volume: 766,700 52 Week Range: $2.1 – $8.815

5. Epizyme, Inc. (EPZM): $15.51

Director David M. Mott acquired 62,019 shares of this biopharmaceutical company, paying $16.03 per share for a total amount of $994,165. Mr. Mott increased his stake by 301.33% to 82,601 shares with this purchase.

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

P/E: N/A Forward P/E: -7.42 Industry P/E: 1,524.03
P/S: 90.8 Price/Book: 5.15 EV/EBITDA: -7.19
Market Cap: $1.57B Avg. Daily Volume: 1,121,648 52 Week Range: $9.74 – $27.82

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

Notable Insider Sales:

1. Elastic N.V. (ESTC): $92.11

Shares of this software application company were sold by 2 insiders:

  • Director Steven Schuurman sold 700,000 shares for $89.70, generating $62.79 million from the sale. These shares were sold indirectly by various entities.
  • SVP and General Counsel W.H. Baird Garrett sold 10,000 shares for $91.42, generating $914,248 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 Elastic N.V. here.

P/E: N/A Forward P/E: -118.09 Industry P/E: 49.60
P/S: 17.85 Price/Book: 18.45 EV/EBITDA: -53.05
Market Cap: $7.63B Avg. Daily Volume: 1,527,095 52 Week Range: $39.01 – $104.1

2. Slack Technologies, Inc. (WORK): $32.53

Shares of this collaboration software company were sold by 4 insiders:

  • Director Andrew Braccia sold 1,136,007 shares for $32.51, generating $36.93 million from the sale. These shares were sold indirectly by a trust.
  • Chief Accounting Officer Brandon Zell sold 37,733 shares for $33.17, generating $1.25 million from the sale.
  • Chief Technology Officer Cal Henderson sold 6,000 shares for $33.42, generating $200,503 from the sale. These shares were sold indirectly by a trust.
  • Sr. VP Sales, Customer Success Robert Frati sold 5,000 shares for $32.79, generating $163,950 from the sale.

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

P/E: N/A Forward P/E: -154.91 Industry P/E: 49.60
P/S: 26.3 Price/Book: 24.4 EV/EBITDA: -31.3
Market Cap: $18.34B Avg. Daily Volume: 19,351,584 52 Week Range: $15.1 – $40.07

3. Biohaven Pharmaceutical Holding Company Ltd. (BHVN): $70

Shares of this biotech company were sold by 2 insiders:

  • Director Gregory Bailey sold 350,000 shares for $72.52, generating $25.38 million from the sale.
  • Special Projects & Medical Oversight Robert Berman sold 66,596 shares for $75.26, generating $5.01 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 Biohaven Pharmaceutical Holding Company Ltd. here.

P/E: N/A Forward P/E: -10.46 Industry P/E: 1,524.03
P/S: 3559.73 Price/Book: 33.51 EV/EBITDA: -6.65
Market Cap: $4.1B Avg. Daily Volume: 954,582 52 Week Range: $26.56 – $76.4

4. Ares Management Corporation (ARES): $38.74

Shares of this asset management company were sold by 2 insiders:

  • Co-Founder & Executive Chairman Antony P. Ressler sold 649,931 shares for $39.28, generating $25.53 million from the sale. These shares were sold indirectly by TJ Capital Investors, LLC.
  • Head of Credit Group Kipp R. deVeer sold 84,643 shares for $40.06, generating $3.39 million from the sale.

You can view the list of recent insider transactions for Ares Management Corporation here.

P/E: 99.08 Forward P/E: 17.94 Industry P/E: 18.95
P/S: 3.94 Price/Book: 8.55 EV/EBITDA: 87.57
Market Cap: $5.13B Avg. Daily Volume: 1,258,751 52 Week Range: $20.2 – $41.88

5. NVIDIA Corporation (NVDA): $366.2

Shares of this semiconductor company were sold by 2 insiders:

  • Director Mark A. Stevens sold 53,566 shares for $377.89, generating $20.24 million from the sale.
  • EVP, Worldwide Field Operations Ajay K. Puri sold 12,849 shares for $372.86, generating $4.79 million from the sale.

You can view the list of recent insider transactions for NVIDIA Corporation here.

P/E: 68.46 Forward P/E: 37.06 Industry P/E: 25.58
P/S: 19.12 Price/Book: 17.19 EV/EBITDA: 56.06
Market Cap: $225.21B Avg. Daily Volume: 13,683,632 52 Week Range: $147.39 – $385.7

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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