Insider Weekends: CEO of Chatham Lodging Trust Buys 85,000 Shares

Welcome to edition 533 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $31.16 million of stock compared to $111.24 million in the week prior. Selling also decreased significantly with insiders selling $749.85 million of stock last week compared to $2.46 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 24.06. In other words, insiders sold more than 24 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 22.1.

Insider Sector Heat Map September 11, 2020

Insider Sector Heat Map September 11, 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. Vistra Corp. (VST): $18.51

Shares of this electricity and natural gas provider were acquired by 2 insiders:

  • President and CEO Curtis A. Morgan acquired 41,176 shares, paying $18.18 per share for a total amount of $748,786. Mr. Morgan increased his stake by 10.20% to 444,759 shares with this purchase.
  • Director Scott B. Helm acquired 20,000 shares, paying $18.19 per share for a total amount of $363,760. Mr. Helm increased his stake by 11.74% to 190,377 shares with this purchase.

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

P/E: 16.04 Forward P/E: 9.26 Industry P/E: 57.45
P/S: 0.79 Price/Book: 1.12 EV/EBITDA: 5.44
Market Cap: $9.05B Avg. Daily Volume: 3,263,214 52 Week Range: $11.3 – $27.96

2. La Jolla Pharmaceutical Company (LJPC): $3.97

Shares of this biotech company were acquired by 3 insiders:

  • Director Kevin C. Tang acquired 278,369 shares, paying $3.94 per share for a total amount of $1.09 million. These shares were purchased indirectly by Tang Capital Partners.
  • Director David A. Ramsay acquired 1,000 shares, paying $3.83 per share for a total amount of $3,830. Mr. Ramsay increased his stake by 2.13% to 48,000 shares with this purchase.

You can view the list of recent insider transactions for La Jolla Pharmaceutical Company here.

P/E: N/A Forward P/E: -2.98 Industry P/E: N/A
P/S: 4.12 Price/Book: N/A EV/EBITDA: -2.85
Market Cap: $108.63M Avg. Daily Volume: 518,342 52 Week Range: $2.3 – $11.38

3. Summit Materials, Inc. (SUM): $16.91

President & CEO Anne P. Noonan acquired 66,000 shares of this construction materials company, paying $15.24 per share for a total amount of $1.01 million.

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

P/E: 18.58 Forward P/E: 18.79 Industry P/E: 23.22
P/S: 0.84 Price/Book: 1.33 EV/EBITDA: 7.66
Market Cap: $1.93B Avg. Daily Volume: 1,171,800 52 Week Range: $7.51 – $25.22

4. Chatham Lodging Trust (CLDT): $7.34

Chairman, President and CEO Jeffrey H. Fisher acquired 85,000 shares of this hotel REIT, paying $7.71 per share for a total amount of $655,300. These shares were purchased indirectly by a trust.

This purchase by the CEO of Chatham caught my eye as I have owned Chatham stock in the past and it was surprising to see the CEO buying shares during the depths of this travel recession. Chatham is a hospitality company focused on extended stay hotels like Courtyard by Marriott, Residence Inn and Hilton Garden Inn. The company owns 40 properties outright (6 unencumbered hotels available as collateral for additional liquidity) and has a minority interest in an additional 94 hotels.

Chatham Portfolio and Markets

Chatham Brands and Markets (source: Investor Presentation)

The company was hit hard by the COVID-19 pandemic and suspended its monthly dividend of 11 cents per share in February. If the company has to pay a dividend to maintain its REIT status, it will declare a dividend in Q4 to be paid out in 2021. The company managed funds from operations (FFO) of 13 cents per share in Q1 but reported a FFO loss of 26 cents in Q2 after revenue declined a whopping 77% year-over-year. Consensus estimates point to the company losing 28 cents this year and FFO of 83 cents next year. This might be optimistic considering business travel will most likely trail leisure travel when the eventual recovery occurs.

Chatham is most likely a 2022 story but the CEO appears bullish based on his 85,000 share purchases last week. His last purchase was a 5,000 share purchase in February 2018 at an average price of $18.48.

You can view the list of recent insider transactions for Chatham Lodging Trust here.

P/E: N/A Forward P/E: -12.23 Industry P/E: 45.16
P/S: 1.51 Price/Book: 0.49 EV/EBITDA: 21.12
Market Cap: $344.27M Avg. Daily Volume: 560,981 52 Week Range: $3.44 – $18.63

5. Orion Engineered Carbons S.A. (OEC): $14.2

Chief Executive Officer Corning F. Painter acquired 50,000 shares of this carbon black products company, paying $12.70 per share for a total amount of $635,000. Mr. Painter increased his stake by 15.48% to 372,977 shares with this purchase.

You can view the list of recent insider transactions for Orion Engineered Carbons S.A. here.

P/E: 20.14 Forward P/E: 12.14 Industry P/E: 75.31
P/S: 0.7 Price/Book: 5.7 EV/EBITDA: 8.23
Market Cap: $858.92M Avg. Daily Volume: 420,151 52 Week Range: $5.93 – $20.78

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

Notable Insider Sales:

1. The Boston Beer Company, Inc. (SAM): $851.51

Shares of this beverages company were sold by 3 insiders:

  • Chairman James C. Koch sold 47,365 shares for $804.52, generating $38.11 million from the sale. 7,365 of these shares were sold indirectly by a foundation managed by the Reporting Person.
  • Director Cynthia A. Fisher sold 7,365 shares for $816.46, generating $6.01 million from the sale.
  • Chief Financial Officer Frank H. Smalla sold 6,193 shares for $832.15, generating $5.15 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 The Boston Beer Company, Inc. here.

P/E: 76.39 Forward P/E: 49.83 Industry P/E: 38.07
P/S: 7.11 Price/Book: 12.38 EV/EBITDA: 39.6
Market Cap: $10.4B Avg. Daily Volume: 166,271 52 Week Range: $290.02 – $897.5

2. Installed Building Products, Inc. (IBP): $94.5

Shares of this building products & equipment company were sold by 2 insiders:

  • President, CEO and Chairman Jeffrey W. Edwards sold 300,000 shares for $91.00, generating $27.3 million from the sale. These shares were sold indirectly by Installed Building Systems.
  • Chief Accounting Officer Todd R. Fry sold 1,000 shares for $94.90, generating $94,902 from the sale.

You can view the list of recent insider transactions for Installed Building Products, Inc. here.

P/E: 34.5 Forward P/E: 18.94 Industry P/E: 16.95
P/S: 1.77 Price/Book: 10.25 EV/EBITDA: 14.74
Market Cap: $2.82B Avg. Daily Volume: 225,265 52 Week Range: $29.02 – $96.75

3. MarketAxess Holdings Inc. (MKTX): $453.07

Shares of this bond trading platform provider were sold by 2 insiders:

  • Chairman & CEO Richard M. McVey sold 42,000 shares for $452.95, generating $19.02 million from the sale.
  • Chief Information Officer Nicholas Themelis sold 4,000 shares for $456.91, generating $1.83 million from the sale.

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

P/E: 65.65 Forward P/E: 57.13 Industry P/E: 18.20
P/S: 27.97 Price/Book: 20.14 EV/EBITDA: 48.04
Market Cap: $17.2B Avg. Daily Volume: 204,718 52 Week Range: $275.5 – $561.68

4. Twist Bioscience Corporation (TWST): $62.51

Shares of this synthetic biology company were sold by 2 insiders:

  • Chief Financial Officer James M. Thorburn sold 120,000 shares for $63.69, generating $7,642,223 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President & CEO Emily M. Leproust sold 100,000 shares for $62.98, generating $6,298,310 from the sale.

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

P/E: N/A Forward P/E: -30.95 Industry P/E: N/A
P/S: 39.82 Price/Book: 7.99 EV/EBITDA: -21.14
Market Cap: $2.92B Avg. Daily Volume: 520,878 52 Week Range: $18.52 – $71.99

5. Wayfair Inc. (W): $252.28

Shares of this e-commerce furniture business were sold by 2 insiders:

  • Chief Product/Marketing Edmond Macri sold 20,000 shares for $258.57, generating $5.17 million from the sale. These shares were sold indirectly by a trust.
  • Chief Operating Officer Thomas Netzer sold 18,300 shares for $250.00, generating $4.58 million from the sale.

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

P/E: N/A Forward P/E: 336.37 Industry P/E: 70.01
P/S: 2.1 Price/Book: N/A EV/EBITDA: -68.37
Market Cap: $24.07B Avg. Daily Volume: 2,412,015 52 Week Range: $21.7 – $349.082

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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