Welcome to edition 543 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $49.91 million of stock compared to $102.19 million in the week prior. Selling also declined with insiders selling $3.08 billion of stock last week compared to $3.13 billion in the week prior. This decline in insider buying at a time when insiders are not in an earnings related quiet period is a little surprising and it comes against the backdrop of market weakness last week. With COVID-19 related cases and deaths spiking sharply across the United States and several countries in Europe, investor appetite for risk appears to be moderating.
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 61.7. In other words, insiders sold almost 62 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 30.62.
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. MultiPlan Corporation (MPLN): $7.56
Shares of this healthcare plans company were acquired by 2 insiders:
- Director Michael Stuart Klein acquired 1,400,000 shares, paying $7.07 per share for a total amount of $9.9 million. These shares were purchased indirectly by M. Klein & Company, LLC.
- President, New Markets Paul Galant acquired 28,550 shares, paying $7.09 per share for a total amount of $202,296.
Mr. Klein also purchased $4.89 million worth of stock in the week prior and I tweeted the following after his purchase:
Mr. Klein was previously the Vice Chairman of Citigroup (C) and then started a strategic advisory firm called M. Klein & Company, which was profiled by Reuters in an article titled Wall Street rainmaker Michael Klein no longer a one-man show. He has also launched a series of special purpose acquisition companies or SPACs in recent years, which have merged with various operating businesses including a data analytics company Clarivate (CCC) and MultiPlan (MPLN).
You can view the list of recent insider transactions for MultiPlan Corporation here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: 5.66||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $5.25B||Avg. Daily Volume: 4,657,677||52 Week Range: $6.12 – $10.47|
2. GreenSky, Inc. (GSKY): $4.09
Shares of this software infrastructure company were acquired by 4 insiders:
- CEO and Chairman of the Board David Zalik acquired 1,105,220 shares, paying $3.47 per share for a total amount of $3.83 million.
- President, Patient Solutions Dennis I. Kelly acquired 27,000 shares, paying $4.07 per share for a total amount of $109,944. Mr. Kelly increased his stake by 17.17% to 184,238 shares with this purchase.
- SVP, Chief Accounting Officer Angela M. Nagy acquired 7,500 shares, paying $3.45 per share for a total amount of $25,875. These shares were purchased indirectly by an IRA.
You can view the list of recent insider transactions for GreenSky, Inc. here.
|P/E: 83.47||Forward P/E: 14.61||Industry P/E: 55.94|
|P/S: 1.44||Price/Book: N/A||EV/EBITDA: 11.96|
|Market Cap: $746.76M||Avg. Daily Volume: 915,207||52 Week Range: $3.05 – $9.84|
3. Morgan Stanley (MS): $57.81
Director Hutham S. Olayan acquired 25,000 shares of Morgan Stanley, paying $55.40 per share for a total amount of $1.39 million. These shares were purchased indirectly by a trust.
Ms. Olayan, is the Chair of a private multinational enterprise founded in 1947, The Olayan Group. She has been the longest serving director of Morgan Stanley and has been on the board since 2006. This is her largest purchase of Morgan Stanley since we started tracking insider data in 2010. The only other time she purchased shares on the open market was in 2011 when she bought 5,000 shares for $20 per share.
You can view the list of recent insider transactions for Morgan Stanley here.
|P/E: 9.77||Forward P/E: 11.25||Industry P/E: 19.70|
|P/S: 2.3||Price/Book: 1.14||EV/EBITDA: N/A|
|Market Cap: $104.57B||Avg. Daily Volume: 12,172,855||52 Week Range: $27.2 – $60.13|
4. SuRo Capital Corp. (SSSS): $11.36
CEO and President Mark D. Klein acquired 116,770 shares of this asset management company, paying $10.03 per share for a total amount of $1.17 million. Mr. Klein increased his stake by 68.73% to 286,675 shares with this purchase.
We wrote briefly about SuRo capital last week following a small purchase by the CEO. The company used to be known as Sutter Rock Capital and was forced to change its name to SuRo Capital because of a lawsuit by Sutter Hill Ventures. SuRo Capital mostly invests in large private technology companies in later rounds and sells their stake after the company goes public. Some might recognize the company as the new incarnation of GSV Capital. Back when it was GSVC it used to trade at a consistent discount to net asset value (NAV) and had stakes in both Facebook and Twitter before those companies went public. I had gotten into GSVC before Twitter went public and the ensuing post-IPO spike in Twitter helped buoy GSVC and the trade worked out well.
SuRo Capital now has some very interesting names in its portfolio including Palantir, which recently went public and has appreciated significantly since going public. Other companies in SuRo’s portfolio include Coursera (I attribute my understanding of AI and Machine Learning to several Coursera courses), Next-door, Course Hero, Blink Health, Lime, etc. Their portfolio is rather concentrated with the top 5 positions accounting for 71% of the portfolio. Coursera and Palantir were top 2 positions when SuRo Capital reported results earlier this month.
Their net asset value (NAV) was $12.46 as of September 30, 2020 and the stock was trading at a discount to NAV at that time. Considering Palantir is up more than 90% since September 30 and SSSS is only up 5%, the current NAV for SSSS is probably even higher assuming they did not sell a large portion of their Palantir stock. I bought a position in SSSS after the first small purchase and it was good to see the CEO purchase even more last week.
You can view the list of recent insider transactions for SuRo Capital Corp. here.
|P/E: 50.49||Forward P/E: 22.72||Industry P/E: 19.70|
|P/S: 173.79||Price/Book: 1.01||EV/EBITDA: N/A|
|Market Cap: $226.22M||Avg. Daily Volume: 833,853||52 Week Range: $3.6 – $14.91|
5. PLx Pharma Inc. (PLXP): $5.12
Executive Chairman Michael J. Valentino acquired 264,900 shares of this late-stage specialty pharmaceutical company, paying $3.79 per share for a total amount of $1 million. Mr. Valentino increased his stake by 134.61% to 461,690 shares with this purchase.
You can view the list of recent insider transactions for PLx Pharma Inc. here.
|P/E: N/A||Forward P/E: -4.57||Industry P/E: 32.24|
|P/S: 862.99||Price/Book: N/A||EV/EBITDA: -4.6|
|Market Cap: $46.88M||Avg. Daily Volume: 17,316||52 Week Range: $1.8 – $5.96|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Walmart Inc. (WMT): $150.24
Shares of Walmart were sold by 3 insiders:
- Director Robson S. Walton sold 450,000 shares for $150.95, generating $67.93 million from the sale. These shares were sold indirectly through a trust.
- Executive Vice President Rachel L. Brand sold 10,000 shares for $149.99, generating $1.49 million from the sale.
- Executive Vice President Judith J. McKenna sold 10,000 shares for $150.49, generating $1.5 million from the sale.
You can view the list of recent insider transactions for Walmart Inc. here.
|P/E: 23.97||Forward P/E: 26.08||Industry P/E: 23.25|
|P/S: 0.79||Price/Book: 5.65||EV/EBITDA: 13.25|
|Market Cap: $425.74B||Avg. Daily Volume: 9,371,101||52 Week Range: $102 – $153.4|
2. AGCO Corporation (AGCO): $91.91
Shares of this agricultural equipment manufacturer were sold by 2 insiders:
- Chairman, President and CEO Martin Richenhagen sold 288,866 shares for $93.82, generating $27.1 million from the sale. 177,148 of these shares were sold indirectly through various trusts and entities.
- Director Wolfgang Deml sold 7,500 shares for $94.38, generating $707,844 from the sale.
You can view the list of recent insider transactions for AGCO Corporation here.
|P/E: 34.26||Forward P/E: 15.37||Industry P/E: 33.90|
|P/S: 0.77||Price/Book: 2.45||EV/EBITDA: 9.77|
|Market Cap: $6.88B||Avg. Daily Volume: 589,773||52 Week Range: $35.33 – $99.74|
3. The Charles Schwab Corporation (SCHW): $46.61
Shares of Charles Schwab were sold by 4 insiders:
- Chairman Charles R. Schwab sold 159,791 shares for $46.96, generating $7.5 million from the sale.
- EVP – Advisor Services Bernard J. Clark sold 101,188 shares for $48.83, generating $4.94 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Roger O. Walther sold 98,100 shares for $48.40, generating $4.75 million from the sale.
- Director Arun Sarin sold 27,835 shares for $48.61, generating $1.35 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 Charles Schwab Corporation here.
|P/E: 21.59||Forward P/E: 19.26||Industry P/E: 19.70|
|P/S: 8.65||Price/Book: 2.31||EV/EBITDA: N/A|
|Market Cap: $87.5B||Avg. Daily Volume: 11,811,370||52 Week Range: $28 – $51.65|
4. SolarWinds Corporation (SWI): $21.98
Shares of this software infrastructure company were sold by 3 insiders:
- President & CEO Kevin B. Thompson sold 700,000 shares for $21.85, generating $15.29 million from the sale.
- EVP CFO & Treasurer James Barton Kalsu sold 68,211 shares for $22.14, generating $1.51 million from the sale.
- EVP, Corp Development & General Counsel Jason Bliss sold 67,758 shares for $22.14, generating $1.5 million from the sale.
You can view the list of recent insider transactions for SolarWinds Corporation here.
|P/E: 183.17||Forward P/E: 20.74||Industry P/E: 57.34|
|P/S: 6.89||Price/Book: 2.46||EV/EBITDA: 37.09|
|Market Cap: $6.9B||Avg. Daily Volume: 485,547||52 Week Range: $11.5 – $22.88|
5. IPG Photonics Corporation (IPGP): $200.73
Shares of this high-performance fiber lasers developer and manufacturer were sold by 2 insiders:
- CEO & Chairman of the Board Valentin P. Gapontsev sold 85,000 shares for $202.15, generating $17.18 million from the sale.
- Chief Accounting Officer Thomas J. Burgomaster sold 2,160 shares for $200.61, generating $433,318 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 IPG Photonics Corporation here.
|P/E: 102||Forward P/E: 42.17||Industry P/E: 70.85|
|P/S: 9.14||Price/Book: 4.33||EV/EBITDA: 30.88|
|Market Cap: $10.7B||Avg. Daily Volume: 264,610||52 Week Range: $98.04 – $214.61|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold long positions in SuRo Capital (SSSS) and Twitter (TWTR). 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.