Welcome to edition 541 of Insider Weekends. Insider buying edged up a wee bit last week with insiders purchasing $133.12 million of stock compared to $132.96 million in the week prior. Selling increased significantly with insiders selling $5.61 billion of stock last week compared to $1.17 billion in the week prior. A majority of the selling was by Jeff Bezos and other insiders of Amazon.com.
The other large sale last week was a $405.21 million share sale of Caravan (CVNA) by 10% owner Ernest C. Garcia II. The innovative used car sales company has seen its shares rise sharply with the stock up more than 165% over the last year. With an estimated net worth north of $5 billion, Mr. Garcia is Carvana’s largest shareholder and is the father of Carvana’s CEO Ernest Garcia III. He is also the owner of the fourth largest used car company DriveTime Automotive and was featured in the Forbes article titled How An Ex-Con Became A Billionaire From Used Cars.
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 42.12. In other words, insiders sold more than 42 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 8.82.
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. American Assets Trust, Inc. (AAT): $20.96
Chairman, CEO & President Ernest S. Rady acquired 305,739 shares of this diversified REIT, paying $21.58 per share for a total amount of $6.59 million. These shares were purchased indirectly by American Assets, Inc.
Mr. Rady has been an active buyer of American Assets Trust stock all of this year but significantly stepped up his purchases last week. American Assets Trust has a diversified portfolio mix of office, retail and multi-family properties. With the recent drop in the stock, the dividend yield is now up to 4.77% with a payout ratio of 50.71%. Unlike other retail REITs, AAT’s revenue and funds from operations (FFO) did not take a dramatic hit from the pandemic with revenue down just 2.4% in Q2 and down 14.22% in Q3 2020.
You can view the list of recent insider transactions for American Assets Trust, Inc. here.
|P/E: 33.32||Forward P/E: 21.61||Industry P/E: 52.42|
|P/S: 3.52||Price/Book: 0.99||EV/EBITDA: 12.57|
|Market Cap: $1.26B||Avg. Daily Volume: 303,261||52 Week Range: $20.15 – $48.15|
2. B. Riley Financial, Inc. (RILY): $29.03
Shares of this financial services and solutions provider were acquired by 2 insiders:
- Chairman and Co-CEO Bryant R. Riley acquired 60,000 shares, paying $26.66 per share for a total amount of $1.59 million. Mr. Riley increased his stake by 1.28% to 4,734,165 shares with this purchase. These shares were purchased indirectly by BRC Partners Opportunity Fund.
- Director Randall E. Paulson acquired 40,000 shares, paying $26.65 per share for a total amount of $1.07 million. Mr. Paulson increased his stake by 104.32% to 78,343 shares with this purchase.
It is good to see that the insiders of B. Riley continue to buy shares in an environment that is ripe for middle market private equity firms and the investment banks that provide services to them. B. Riley was the spotlight idea of our September 2020 newsletter for premium subscribers and I started a position in the company after that newsletter was published. Given below is a short excerpt from that newsletter,
Their advisory services businesses combined with their recent penchant to acquire brands or companies outright makes me think of B. Riley as a baby Berkshire Hathaway. The siren call of discovering the next Berkshire Hathaway or the next Warren Buffett has lead many investors astray and the investment landscape is littered with the ghosts of Eddie Lampert, Sardar Biglari, Prem Watsa, etc. That said, the more I looked into B. Riley, the more intrigued I was by the company. While the stock has appreciated handsomely from its March lows, the enterprise value of the company is just $752.27 million (market cap of $684.17 million, plus $55.6 million of preferred shares and $12.5 million of net debt) and I expect years of growth from the company as it navigates a potentially challenging macroeconomic landscape.
You can view the list of recent insider transactions for B. Riley Financial, Inc. here.
|P/E: 16.72||Forward P/E: N/A||Industry P/E: 18.49|
|P/S: 1.33||Price/Book: 1.97||EV/EBITDA: N/A|
|Market Cap: $738.28M||Avg. Daily Volume: 110,430||52 Week Range: $12.94 – $30.38|
3. OPKO Health, Inc. (OPK): $3.64
CEO & Chairman Phillip Frost M.D. acquired 600,000 shares of this medical devices and drug development company, paying $3.45 per share for a total amount of $2.07 million. These shares were purchased indirectly by Frost Gamma Investments Trust.
You can view the list of recent insider transactions for OPKO Health, Inc. here.
|P/E: N/A||Forward P/E: 18.2||Industry P/E: N/A|
|P/S: 2.09||Price/Book: 1.5||EV/EBITDA: 34.54|
|Market Cap: $2.44B||Avg. Daily Volume: 11,748,143||52 Week Range: $1.12 – $6.47|
4. Covenant Logistics Group, Inc. (CVLG): $15
Shares of this trucking company were acquired by 2 insiders:
- Co-President and COO John A. Tweed acquired 97,688 shares, paying $14.08 per share for a total amount of $1.38 million. Mr. Tweed increased his stake by 60.87% to 258,175 shares with this purchase.
- Chairman and CEO David Ray Parker acquired 36,300 shares, paying $13.66 per share for a total amount of $495,843. Mr. Parker increased his stake by 1.66% to 2,220,871 shares with this purchase.
You can view the list of recent insider transactions for Covenant Logistics Group, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 62.66|
|P/S: 0.3||Price/Book: N/A||EV/EBITDA: 5.07|
|Market Cap: $257.01M||Avg. Daily Volume: 137,001||52 Week Range: $6.54 – $20.7|
5. Charles River Laboratories International, Inc. (CRL): $250.66
Director Richard F. Wallman acquired 7,200 shares of this early-stage contract research company, paying $233.20 per share for a total amount of $1.68 million. Mr. Wallman increased his stake by 29.37% to 31,715 shares with this purchase. 6,050 of these shares were purchased indirectly by Mr. Wallman’s spouse.
You can view the list of recent insider transactions for Charles River Laboratories International, Inc. here.
|P/E: 46.11||Forward P/E: 28.48||Industry P/E: 43.26|
|P/S: 4.54||Price/Book: 7.1||EV/EBITDA: 23.83|
|Market Cap: $12.47B||Avg. Daily Volume: 332,493||52 Week Range: $95.58 – $254.45|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Amazon.com, Inc. (AMZN): $3311.37
Shares of Amazon were sold by 4 insiders:
- Chairman, CEO and President Jeffrey P. Bezos sold 1,000,000 shares for $3,022.84, generating $3.02 billion from the sale.
- CEO Amazon Web Services Andrew R. Jassy sold 6,945 shares for $3,061.74, generating $21.26 million from the sale.
- CEO Worldwide Consumer Jeffrey A. Wilke sold 2,000 shares for $3,011.40, generating $6.02 million from the sale. These shares were sold indirectly through a trust.
- Director Jonathan Rubinstein sold 329 shares for $3,061.74, generating $1 million from the sale.
Jeff Bezos has been a big seller of Amazon.com stock this year starting with a large 2 million shares sale worth $4.07 billion in February and then another 1 million shares sale in August worth $3.13 billion as you can see here. In total he sold 4 million shares worth $10.22 billion this year. To put this in perspective the median market cap of the 505 constituents of the S&P 500 index is $22.34 billion. He sold 1.5 million shares worth $2.83 billion last year and just 20,164 shares in 2018.
You can view the list of recent insider transactions for Amazon.com, Inc. here.
|P/E: 96.82||Forward P/E: 72.81||Industry P/E: 69.65|
|P/S: 4.78||Price/Book: 20.08||EV/EBITDA: 38.66|
|Market Cap: $1.66T||Avg. Daily Volume: 5,038,263||52 Week Range: $1626.03 – $3552.25|
2. Microsoft Corporation (MSFT): $223.72
Shares of Microsoft were sold by 2 insiders:
- President Bradford L. Smith sold 200,000 shares for $222.58, generating $44.52 million from the sale.
- Chief Executive Officer Satya Nadella sold 104,500 shares for $222.52, generating $23.25 million from the sale. These shares were sold indirectly by GST.
You can view the list of recent insider transactions for Microsoft Corporation here.
|P/E: 36.09||Forward P/E: 29.99||Industry P/E: N/A|
|P/S: 11.5||Price/Book: 13.71||EV/EBITDA: 24.03|
|Market Cap: $1.69T||Avg. Daily Volume: 31,761,436||52 Week Range: $132.52 – $232.86|
3. Charter Communications, Inc. (CHTR): $644.49
Shares of this cable services provider were sold by 5 insiders:
- Chief Financial Officer Christopher L. Winfrey sold 64,519 shares for $595.80, generating $38.44 million from the sale. 6,265 of these shares were sold indirectly through a trust.
- Senior Executive Vice President David Ellen sold 17,256 shares for $640.45, generating $11.05 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- EVP/Chief Marketing Officer Jonathan Hargis sold 9,679 shares for $594.81, generating $5.76 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- EVP/General Counsel/Corp Secretary Richard R. Dykhouse sold 7,927 shares for $632.34, generating $5.01 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Balan Nair sold 2,260 shares for $637.61, generating $1.44 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 Charter Communications, Inc. here.
|P/E: 51.1||Forward P/E: 30.7||Industry P/E: 44.83|
|P/S: 2.73||Price/Book: 5.41||EV/EBITDA: 13.25|
|Market Cap: $128.82B||Avg. Daily Volume: 1,002,780||52 Week Range: $345.67 – $663.7|
4. The Boston Beer Company, Inc. (SAM): $1062
Shares of this beverage company were sold by 2 insiders:
- Director Cynthia A. Fisher sold 31,628 shares for $1030.11, generating $32.58 million from the sale. 2,228 of these shares were sold as a result of exercising options immediately prior to the sale.
- Chairman James C. Koch sold 22,500 shares for $1030.54, generating $23.19 million from the sale.
You can view the list of recent insider transactions for The Boston Beer Company, Inc. here.
|P/E: 75.62||Forward P/E: 47.07||Industry P/E: 38.17|
|P/S: 8.25||Price/Book: 13.95||EV/EBITDA: 41.39|
|Market Cap: $13B||Avg. Daily Volume: 122,681||52 Week Range: $290.02 – $1092.8|
5. Pinterest, Inc. (PINS): $64.74
Director Jeremy S. Levine sold 733,377 shares of this social media platform for $58.76, generating $43.09 million from the sale. These shares were sold indirectly by various entities.
You can view the list of recent insider transactions for Pinterest, Inc. here.
|P/E: N/A||Forward P/E: 111.62||Industry P/E: 41.96|
|P/S: 28.03||Price/Book: 20.59||EV/EBITDA: -145.96|
|Market Cap: $38.88B||Avg. Daily Volume: 18,730,301||52 Week Range: $10.1 – $68.93|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in B. Riley Financial (RILY). 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.