Insider Weekends: A Rather Morbid Insider Purchase

Welcome to edition 546 of Insider Weekends. Insider buying decreased last week with insiders purchasing $66.85 million of stock compared to $82.04 million in the week prior. Selling increased with insiders selling $2.97 billion of stock last week compared to $2.81 billion in the week prior.

Insider enthusiasm for their stocks appeared to have waned last week even as the S&P 500 and Nasdaq hit all time highs before giving back some of those gains. CNN’s Fear & Greed Index, which is a good gauge of market sentiment, remains in Extreme Greed territory and was even higher the week prior. With the exception of an insider purchase at a rather morbid company as discussed below, most of the others in the top 5 insider purchases did not pique my interest.

A couple of insider purchases that did not make the list but that stood out included yet another insider purchase at cosmetics company Coty (COTY) and a $200K purchase by the CFO of ShotSpotter (SSTI), a company that helps police and first responders determined the location of a gunshot when a gun is fired.

CNN's Fear & Greed Index

Fear & Greed Index (source: CNN)

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 44.36. In other words, insiders sold more than 44 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 34.2.

Insider Sector Heat Map December 11, 2020

Insider Sector Heat Map December 11, 2020

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. HC2 Holdings, Inc. (HCHC): $3.65

Director Avram A. Glazer acquired 340,548 shares of this construction and engineering company, paying $3.48 per share for a total amount of $1.19 million. These shares were purchased indirectly by Lancer Capital.

You can view the list of recent insider transactions for HC2 Holdings, Inc. here.

P/E: N/A Forward P/E: -3.09 Industry P/E: 151.25
P/S: 0.15 Price/Book: 0.46 EV/EBITDA: 17.18
Market Cap: $279.54M Avg. Daily Volume: 443,084 52 Week Range: $1.29 – $4.33

2. Ardelyx, Inc. (ARDX): $6.68

Director David M. Mott acquired 170,000 shares of this biotech company, paying $5.89 per share for a total amount of $1 million. Mr. Mott increased his stake by 68.75% to 417,284 shares with this purchase.

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

P/E: N/A Forward P/E: -5.61 Industry P/E: N/A
P/S: 75.24 Price/Book: 4.59 EV/EBITDA: -5.88
Market Cap: $602.86M Avg. Daily Volume: 519,539 52 Week Range: $4.22 – $8.815

3. Carriage Services, Inc. (CSV): $29.71

CEO Melvin C. Payne acquired 29,000 shares of this funeral and cemetery services provider, paying $30.02 per share for a total amount of $870,580. Mr. Payne increased his stake by 2.34% to 1,269,409 shares with this purchase.

Carriage Services has been growing by partnering or acquiring independent funeral homes for several decades. We have seen a smattering of insider purchases at the company for several years and a cluster of insiders bought shares in the mid to high teens earlier this year in what turned out to be well timed purchases. This is however the first purchase by the CEO since November 2018 when he purchased 150,000 shares at an average price of $16.39 as you can see here.

Revenue growth at the company has accelerated over the last three quarters (even before the pandemic hit us) and earnings have followed suit. Trading at less than 12 times EBITDA and expectations of earnings growing to $2.21 per share next year and $2.51 per share the year after, I can see why insiders are enthusiastic despite the big run up in the stock price.

You can view the list of recent insider transactions for Carriage Services, Inc. here.

P/E: 52.03 Forward P/E: 13.5 Industry P/E: N/A
P/S: 1.72 Price/Book: 2.29 EV/EBITDA: 11.69
Market Cap: $533.88M Avg. Daily Volume: 88,971 52 Week Range: $13.54 – $31.99

4. CuriosityStream Inc. (CURI): $8.85

Director John S. Hendricks acquired 78,000 shares of this media and entertainment company, paying $8.99 per share for a total amount of $701,220. Mr. Hendricks increased his stake by 12% to 728,000 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 10.18 Price/Book: N/A EV/EBITDA: -11.18
Market Cap: $355.72M Avg. Daily Volume: 99,153 52 Week Range: $7.44 – $12.057

5. Cannae Holdings, Inc. (CNNE): $42.52

Chief Executive Officer Richard N. Massey acquired 15,000 shares of this principal investment firm, paying $42.33 per share for a total amount of $634,950. Mr. Massey increased his stake by 5.67% to 279,536 shares with this purchase.

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

P/E: 2.71 Forward P/E: -132.88 Industry P/E: N/A
P/S: 5.62 Price/Book: 1.2 EV/EBITDA: -36.58
Market Cap: $3.9B Avg. Daily Volume: 427,648 52 Week Range: $20.51 – $44.87

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $273.55

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 284,779 shares for $283.05, generating $80.61 million from the sale. These shares were sold indirectly through various trusts and entities.
  • VP and General Counsel Jennifer Newstead sold 310 shares for $286.23, generating $88,731 from the sale.

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

P/E: 31.16 Forward P/E: 26.13 Industry P/E: 39.87
P/S: 9.87 Price/Book: 6.62 EV/EBITDA: 24.31
Market Cap: $779.15B Avg. Daily Volume: 19,680,143 52 Week Range: $137.1 – $304.67

2. The Boston Beer Company, Inc. (SAM): $940.17

Chairman James C. Koch sold 50,000 shares of this beverage company for $934.61, generating $46.73 million from the sale.

You can view the list of recent insider transactions for The Boston Beer Company, Inc. here.

P/E: 66.95 Forward P/E: 41.09 Industry P/E: 42.65
P/S: 7.3 Price/Book: 12.35 EV/EBITDA: 38.29
Market Cap: $11.51B Avg. Daily Volume: 124,082 52 Week Range: $290.02 – $1092.8

3. PVH Corp. (PVH): $94.33

Shares of this apparel company were sold by 4 insiders:

  • Chairman & CEO Emanuel Chirico sold 378,622 shares for $90.47, generating $34.26 million from the sale.
  • SVP, Treasurer, Investor Relations, Dana Perlman sold 5,756 shares for $90.08, generating $518,499 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • SVP and Corporate Controller James Holmes sold 2,401 shares for $91.03, generating $218,560 from the sale.
  • EVP, Cheif HR Officer David F. Kozel sold 1,846 shares for $91.48, generating $168,863 from the sale.

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

P/E: N/A Forward P/E: 14.56 Industry P/E: 120.78
P/S: 0.88 Price/Book: 1.43 EV/EBITDA: 32.29
Market Cap: $6.71B Avg. Daily Volume: 1,278,070 52 Week Range: $28.4 – $108.06

4. WW International, Inc. (WW): $29.04

Director Oprah Winfrey sold 962,342 shares of this weight management products and services provider for $30.83, generating $29.66 million from the sale. 263,533 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 WW International, Inc. here.

P/E: 22.17 Forward P/E: 13.26 Industry P/E: N/A
P/S: 1.43 Price/Book: N/A EV/EBITDA: 10.44
Market Cap: $1.98B Avg. Daily Volume: 1,093,146 52 Week Range: $9.75 – $47.19

5. MarketAxess Holdings Inc. (MKTX): $547.67

Shares of this electronic trading platform were sold by 3 insiders:

  • Chairman & CEO Richard M. McVey sold 41,000 shares for $565.17, generating $23.17 million from the sale.
  • Chief Information Officer Nicholas Themelis sold 4,000 shares for $546.49, generating $2.19 million from the sale.
  • General Counsel and Secretary Scott Pintoff sold 250 shares for $566.13, generating $141,533 from the sale.

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

P/E: 75.43 Forward P/E: 66.06 Industry P/E: 20.37
P/S: 31.25 Price/Book: 23.17 EV/EBITDA: 54.92
Market Cap: $20.24B Avg. Daily Volume: 257,501 52 Week Range: $275.5 – $606.45

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.

Leave A Comment

You must be logged in to post a comment.