Welcome to edition 542 of Insider Weekends. Insider buying declined last week with insiders purchasing $102.19 million of stock compared to $133.12 million in the week prior. Selling also declined with insiders selling $3.13 billion of stock last week compared to $5.61 billion in the week prior.
When we first computed the weekly insider buys numbers it showed that insiders had purchased more than half a billion dollars worth of stock, which is highly unusual in this kind of market environment. The market appears to be looking past rising COVID-19 cases and election uncertainty and is instead focused on the positive results from Pfizer’s vaccine and the potential of a large stimulus early next year. Diving deeper into the purchases, I realized that the big spike was mostly because of a $421 million “purchase” of Kraft Heinz (KHC) that turned out to a transfer of shares from one private entity to another as you can see from the footnotes of the form 4 filing.
Beyond this “non-purchase” that skewed the numbers, there were several others that were interesting including Camping World (CWH) discussed below and ones that did not make the top 5 list like a $1.66 million purchase of Lions Gate Entertainment (LGF) by one of its directors and a purchase of SuRo Capital (SSSS) I tweeted about last week.
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 30.62. In other words, insiders sold almost 31 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 42.12.
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. Camping World Holdings, Inc. (CWH): $28
Shares of this outdoor and camping retailer were acquired by 2 insiders:
- Director Stephen Adams acquired 200,000 shares, paying $24.55 per share for a total amount of $4.91 million. These shares were purchased indirectly through a trust.
- Director Michael W. Malone acquired 2,070 shares, paying $24.14 per share for a total amount of $49,962. Mr. Malone increased his stake by 10.55% to 21,700 shares with this purchase.
Camping World has had a wild ride this year with the stock dropping with the rest of the market in March and then going on a huge rally that saw the stock go up more than ten-fold in the span of four months. The company operates more than 160 locations across the United States where it sells RVs, repairs RVs and sells other camping gear. The stock showed up on my radar after I noticed a series of insider purchases by its CEO Marcus Lemonis that started in March of this year and continued through September.
Investors might recognize Mr. Lemonis has the host of the show Profit on CNBC. Mr. Lemonis got his start in the RV business at the urging of a family friend and legendary car executive Lee Iacocca. Camping World took a big hit last week after efficacy data for Pfizer’s COVID-19 vaccine was published. The general thesis was that consumers might go back to traditional travel options and the tailwinds that helped RVs and Camping World will subside. These two directors of the company seem to think otherwise.
You can view the list of recent insider transactions for Camping World Holdings, Inc. here.
|P/E: 13.44||Forward P/E: 8.38||Industry P/E: 40.21|
|P/S: 0.47||Price/Book: 19.23||EV/EBITDA: 6.82|
|Market Cap: $2.49B||Avg. Daily Volume: 2,843,990||52 Week Range: $3.4 – $42.49|
2. MultiPlan Corporation (MPLN): $6.69
Director Michael Stuart Klein acquired 741,000 shares of this healthcare technology company, paying $6.60 per share for a total amount of $4.89 million. These shares were purchased indirectly by M. Klein & Company, LLC.
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: 4.81||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $4.47B||Avg. Daily Volume: 4,516,769||52 Week Range: $6.12 – $10.47|
3. Vertex Pharmaceuticals Incorporated (VRTX): $225.52
Director Bruce I. Sachs acquired 15,000 shares of this biotech company, paying $217.36 per share for a total amount of $3.26 million. Mr. Sachs increased his stake by 133.81% to 26,210 shares with this purchase.
You can view the list of recent insider transactions for Vertex Pharmaceuticals Incorporated here.
|P/E: 22.1||Forward P/E: 19.68||Industry P/E: N/A|
|P/S: 9.79||Price/Book: 7.21||EV/EBITDA: 19.06|
|Market Cap: $58.64B||Avg. Daily Volume: 1,863,755||52 Week Range: $197.47 – $306.08|
4. Aon Plc (AON): $204.44
Shares of this professional services firm were acquired by 2 insiders:
- Director Lester B. Knight acquired 10,000 shares, paying $186.55 per share for a total amount of $1.87 million. These shares were purchased indirectly through a trust.
- Chief Operating Officer John G. Bruno acquired 1,000 shares, paying $186.46 per share for a total amount of $186,460. Mr. Bruno increased his stake by 1.46% to 69,685 shares with this purchase.
You can view the list of recent insider transactions for Aon Plc here.
|P/E: 26.35||Forward P/E: 19.07||Industry P/E: N/A|
|P/S: 4.31||Price/Book: 13.23||EV/EBITDA: 14.8|
|Market Cap: $47.36B||Avg. Daily Volume: 1,500,340||52 Week Range: $143.93 – $238.19|
5. American Assets Trust, Inc. (AAT): $26.6
Chairman, CEO & President Ernest S. Rady acquired 54,994 shares of this diversified REIT, paying $25.72 per share for a total amount of $1.41 million.
You can view the list of recent insider transactions for American Assets Trust, Inc. here.
|P/E: 42.29||Forward P/E: 27.42||Industry P/E: 56.09|
|P/S: 4.47||Price/Book: 1.25||EV/EBITDA: 13.57|
|Market Cap: $1.6B||Avg. Daily Volume: 324,809||52 Week Range: $20.15 – $48.15|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. The Carlyle Group Inc. (CG): $27.8
Founder and Co-Executive Chairman David M. Rubenstein sold 2,000,000 shares of this private equity firm for $27.32, generating $54.64 million from the sale.
You can view the list of recent insider transactions for The Carlyle Group Inc. here.
|P/E: N/A||Forward P/E: 12.99||Industry P/E: N/A|
|P/S: 5.22||Price/Book: 4.44||EV/EBITDA: 89.36|
|Market Cap: $9.82B||Avg. Daily Volume: 965,787||52 Week Range: $15.21 – $34.98|
2. Paylocity Holding Corporation (PCTY): $189.14
Shares of this software application company were sold by 3 insiders:
- Director Steven I. Sarowitz sold 242,000 shares for $194.56, generating $47,.08 million from the sale. 42,000 of these shares were sold indirectly by the Julian Grace Foundation.
- Chief Executive Officer Steven R. Beauchamp sold 27,157 shares for $194.31, generating $5.28 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- SVP of Product and Technology Edward W. Gaty sold 10,000 shares for $184.56, generating $1.85 million from the sale.
You can view the list of recent insider transactions for Paylocity Holding Corporation here.
|P/E: 168.88||Forward P/E: 90.5||Industry P/E: 57.03|
|P/S: 17.99||Price/Book: 26.51||EV/EBITDA: 118.12|
|Market Cap: $10.26B||Avg. Daily Volume: 331,446||52 Week Range: $66.98 – $209.59|
3. Pacific Biosciences of California, Inc. (PACB): $16.74
Director Michael Hunkapiller sold 1,950,000 shares of this diagnostics & research company for $14.79, generating $28.84 million from the sale. 450,000 of these shares were sold indirectly by Alloy Ventures.
You can view the list of recent insider transactions for Pacific Biosciences of California, Inc. here.
|P/E: N/A||Forward P/E: -35.62||Industry P/E: 42.05|
|P/S: 37.86||Price/Book: 23.25||EV/EBITDA: -31.53|
|Market Cap: $3.02B||Avg. Daily Volume: 4,242,433||52 Week Range: $2.2 – $17.14|
4. Global Payments Inc. (GPN): $188.41
Shares of this payment technology provider were sold by 3 insiders:
- CEO Jeffrey Steven Sloan sold 123,035 shares for $196.70, generating $24.2 million from the sale. 71,204 of these shares were sold as a result of exercising options immediately prior to the sale.
- President and COO Cameron M. Bready sold 17,756 shares for $194.09, generating $3.45 million from the sale.
- Director John Thompson Turner sold 1,064 shares for $190.53, generating $202,724 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 Global Payments Inc. here.
|P/E: 112.62||Forward P/E: 23.41||Industry P/E: 55.47|
|P/S: 7.54||Price/Book: 2.03||EV/EBITDA: 22.46|
|Market Cap: $56.4B||Avg. Daily Volume: 1,788,578||52 Week Range: $105.54 – $209.62|
5. Centene Corporation (CNC): $69.05
Shares of this multi-national healthcare operator were sold by 3 insiders:
- Chairman, President & CEO Michael F. Neidorff sold 300,000 shares for $70.12, generating $21.04 million from the sale.
- EVP, Markets & Products Kenneth A. Burdick sold 35,000 shares for $70.16, generating $2.46 million from the sale.
- EVP, M&A & Chief Strategy Officer Jesse N. Hunter sold 22,500 shares for $70.00, generating $1.58 million from the sale.
You can view the list of recent insider transactions for Centene Corporation here.
|P/E: 18.31||Forward P/E: 12.53||Industry P/E: 21.04|
|P/S: 0.42||Price/Book: 1.56||EV/EBITDA: 8.36|
|Market Cap: $40.04B||Avg. Daily Volume: 3,529,181||52 Week Range: $43.96 – $74.7|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in Lions Gate Entertainment (LGF). 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.