Welcome to edition 535 of Insider Weekends. Insider buying increased last week with insiders purchasing $138.44 million of stock compared to $108.3 million in the week prior. I was a little surprised to see this spike in insider buying right as we are approaching the end of the third quarter and companies begin to enter their earnings related quiet periods. Looking at the data it became evident that insider buying was indeed muted with the exception of two large purchases. Brad Gerstner, the founder and CIO of Altimeter Capital and a 10% owner of the hottest Silicon Valley company Snowflake (SNOW), picked up $50 million worth of shares at the IPO for $120/share.
A director of Broadcom also picked up a large number of shares as discussed below. In fact there were very few management purchases last week and most purchases were by directors of companies, which I usually find less interesting unless the director is also the Chairman of the Board or has had a long history with the company. Selling also increased with insiders selling $2.17 billion of stock last week compared to $2.07 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 15.69. In other words, insiders sold almost 16 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 19.1.
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. Broadcom Inc. (AVGO): $356.8
Director Henry Samueli acquired 101,740 shares of this semiconductor company, paying $361.45 per share for a total amount of $36.77 million. These shares were purchased indirectly by H&S Investments I L.P.
It was interesting to see such a large purchase at a company where we rarely see insider buying. In addition, Broadcom isn’t exactly cheap and is trading close to all time highs. Revenue growth in each of the last three quarters was in the low single digits. When I looked at the filing more closely, I realized that Mr. Samueli gifted 169,912 shares and then turned around and purchased 101,740 shares on the open market.
Mr. Samueli, a professor at UCLA, co-Founded Broadcom with his Ph.D student Henry Nicholas in 1991. At the time of Avago’s $37 billion acquisition of Broadcom in 2016, he was the Chief Technical Officer of Broadcom. The new combined company adopted the Broadcom name but the stock symbol remained AVGO.
You can view the list of recent insider transactions for Broadcom Inc. here.
|P/E: 67||Forward P/E: 14.03||Industry P/E: 28.79|
|P/S: 6.22||Price/Book: 6.12||EV/EBITDA: 16.98|
|Market Cap: $144.33B||Avg. Daily Volume: 1,908,003||52 Week Range: $155.67 – $378.96|
2. TravelCenters of America Inc. (TA): $18.7
Director Adam D. Portnoy acquired 104,738 shares of this gas stations, travel centers and restaurants operator, paying $21.57 per share for a total amount of $2.26 million. These shares were purchased indirectly by The RMR Group Inc.
You can view the list of recent insider transactions for TravelCenters of America Inc. here.
|P/E: 5.34||Forward P/E: 13.17||Industry P/E: 42.19|
|P/S: 0.05||Price/Book: 0.48||EV/EBITDA: 13.27|
|Market Cap: $269.24M||Avg. Daily Volume: 426,889||52 Week Range: $5.51 – $23.26|
3. Kingsway Financial Services Inc. (KFS): $2.81
Director Joseph Stilwell acquired 190,000 shares of this extended warranty and leased real estate business, paying $3.10 per share for a total amount of $589,000. These shares were purchased indirectly by Stilwell Associates, L.P.
You can view the list of recent insider transactions for Kingsway Financial Services Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 14.46|
|P/S: 1.01||Price/Book: 6.2||EV/EBITDA: 52.62|
|Market Cap: $63.82M||Avg. Daily Volume: 44,906||52 Week Range: $1.26 – $3.36|
4. DaVita Inc. (DVA): $83.9
Director John M. Nehra acquired 5,500 shares of this kidney dialysis services provider, paying $83.85 per share for a total amount of $461,188.
You can view the list of recent insider transactions for DaVita Inc. here.
|P/E: 13.48||Forward P/E: 11.22||Industry P/E: 19.10|
|P/S: 0.89||Price/Book: 4.75||EV/EBITDA: 8.75|
|Market Cap: $10.23B||Avg. Daily Volume: 1,076,084||52 Week Range: $54.09 – $92.67|
5. CB Financial Services, Inc. (CBFV): $18.44
Director John J. LaCarte acquired 23,758 shares of this regional bank, paying $19.00 per share for a total amount of $451,283. These shares were purchased indirectly by various entities.
You can view the list of recent insider transactions for CB Financial Services, Inc. here.
|P/E: 8.27||Forward P/E: 14.52||Industry P/E: 11.86|
|P/S: 1.99||Price/Book: 0.65||EV/EBITDA: N/A|
|Market Cap: $98.96M||Avg. Daily Volume: 22,948||52 Week Range: $16.25 – $30.95|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Elastic N.V. (ESTC): $106.39
Shares of this software application company were sold by 2 insiders:
- Director Steven Schuurman sold 750,000 shares for $104.76, generating $78.57 million from the sale. These shares were sold indirectly by various entities.
- SVP and General Counsel Baird W.H. Garrett sold 10,000 shares for $108.06, generating $1.08 million from the sale.
You can view the list of recent insider transactions for Elastic N.V. here.
|P/E: N/A||Forward P/E: -149.85||Industry P/E: 56.95|
|P/S: 19.66||Price/Book: 21.1||EV/EBITDA: -68.63|
|Market Cap: $9.18B||Avg. Daily Volume: 1,098,375||52 Week Range: $39.01 – $117.53|
2. Zoom Video Communications, Inc. (ZM): $496.5
Shares of Zoom Video Communications were sold by 2 insiders:
- Chief Executive Officer Eric S. Yuan sold 140,285 shares for $493.77, generating $69.27 million from the sale.
- Chief Financial Officer Kelly Steckelberg sold 11,066 shares for $420.65, generating $4.65 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Zoom Video Communications, Inc. here.
|P/E: 634.1||Forward P/E: 173.6||Industry P/E: 56.95|
|P/S: 104.87||Price/Book: 117.77||EV/EBITDA: 556.44|
|Market Cap: $141.22B||Avg. Daily Volume: 9,382,217||52 Week Range: $60.968 – $529.74|
3. Beyond Meat, Inc. (BYND): $155.02
Director Seth Goldman sold 127,500 shares of this plant-based meat products company for $144.81, generating $18.46 million from the sale. These shares were sold indirectly by a trust. 29,734 of 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 Beyond Meat, Inc. here.
|P/E: N/A||Forward P/E: 250.03||Industry P/E: 25.83|
|P/S: 24.15||Price/Book: 24.82||EV/EBITDA: 690.06|
|Market Cap: $9.68B||Avg. Daily Volume: 4,634,625||52 Week Range: $48.18 – $167.16|
4. 89bio, Inc. (ETNB): $25.36
Director Anat Naschitz sold 275,000 shares of this biotech company for $28.00, generating $7,700,000 from the sale. These shares were sold indirectly by OrbiMed Private Investments.
You can view the list of recent insider transactions for 89bio, Inc. here.
|P/E: N/A||Forward P/E: -7.31||Industry P/E: N/A|
|P/S: N/A||Price/Book: N/A||EV/EBITDA: -8.41|
|Market Cap: $516.68M||Avg. Daily Volume: 171,550||52 Week Range: $14 – $47.253|
5. Guardant Health, Inc. (GH): $111.8
Shares of this precision oncology company were sold by 2 insiders:
- Chief Executive Officer Helmy Eltoukhy sold 65,422 shares for $102.09, generating $6.68 million from the sale.
- Director Samir Kaul sold 10,000 shares for $100.83, generating $1 million from the sale.
You can view the list of recent insider transactions for Guardant Health, Inc. here.
|P/E: N/A||Forward P/E: -90.16||Industry P/E: 19.10|
|P/S: 43.15||Price/Book: 9.96||EV/EBITDA: -81.81|
|Market Cap: $11.12B||Avg. Daily Volume: 837,826||52 Week Range: $55.9 – $112.88|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Zoom Video Communications (ZM). 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.