Insider Weekends: Bryant Riley Continues Buying At Higher Prices

Welcome to edition 553 of Insider Weekends. In a tumultuous week that saw the S&P 500 drop 3.3%, insiders stepped up their buying with $30.78 million of stock purchased compared to $5.43 million in the week prior. After several weeks of lackluster purchases during the earnings related quiet period for most companies, it was good to see an interesting crop of purchases last week. Selling decreased with insiders selling $1.17 billion of stock last week compared to $1.69 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 37.93. In other words, insiders sold almost 38 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 310.71.

Insider Sector Heat Map January 15, 2021

Insider Sector Heat Map January 15, 2021

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. Teledyne Technologies Incorporated (TDY): $357.01

Executive Chairman Robert Mehrabian acquired 10,000 shares of this aerospace, defense and industrial instrumentation company, paying $366.05 per share for a total amount of $3.66 million. These shares were purchased indirectly through a trust.

This is the first insider purchase we have seen of Teledyne since June 2017 when Mr. Mehrabian, who was then the CEO of the company, purchased 10,000 shares at an average price of $129.40. Teledyne’s stock dropped more than 7% on January 4th when it announced a cash plus stock deal to acquire FLIR Systems (FLIR) for $8 billion. The stock is down nearly 9% this year and maybe Mr. Mehrabian is feeling confident about the synergies from this deal.

You can view the list of recent insider transactions for Teledyne Technologies Incorporated here.

P/E: 33.67 Forward P/E: 27.8 Industry P/E: N/A
P/S: 4.27 Price/Book: 4.2 EV/EBITDA: 22.45
Market Cap: $13.19B Avg. Daily Volume: 266,893 52 Week Range: $195.34 – $398.68

2. B. Riley Financial, Inc. (RILY): $48.2

Shares of B. Riley Financial were acquired by 2 insiders:

  • Chairman and Co-CEO Bryant R. Riley acquired 40,000 shares, paying $48.13 per share for a total amount of $1.93 million. Mr. Riley increased his stake by 0.81% to 4,981,677 shares with this purchase.
  • Director Michael Joseph Sheldon acquired 2,089 shares, paying $48.95 per share for a total amount of $102,257. Mr. Sheldon increased his stake by 9.68% to 23,660 shares with this purchase.

Mr. Riley has been an active buyer of B. Riley for the better part of the last four years and it is good to see an independent outside director join him in buying the stock. Mr. Riley stepped up his purchases late last year and we wrote the following about his purchases last November,

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.

The stock is up 80% since we picked the company last September and it is a little surprising to see not just Mr. Riley buy shares but also Mr. Sheldon pay up for the stock he had last purchased for just $18.91 in March 2020. Given below is a short excerpt from the September 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: 27.77 Forward P/E: N/A Industry P/E: 19.59
P/S: 2.34 Price/Book: 3.28 EV/EBITDA: N/A
Market Cap: $1.29B Avg. Daily Volume: 171,796 52 Week Range: $12.94 – $52.79

3. Intel Corporation (INTC): $55.51

Shares of Intel were acquired by 2 insiders:

  • CEO Robert Holmes Swan acquired 27,244 shares, paying $55.57 per share for a total amount of $1.51 million. Mr. Swan increased his stake by 8.57% to 345,318 shares with this purchase.
  • Chief Financial Officer George S. Davis acquired 9,095 shares, paying $55.34 per share for a total amount of $503,317. Mr. Davis increased his stake by 13.43% to 76,823 shares with this purchase.

You can view the list of recent insider transactions for Intel Corporation here.

P/E: 11.24 Forward P/E: 11.38 Industry P/E: 35.39
P/S: 2.9 Price/Book: 2.78 EV/EBITDA: 6.67
Market Cap: $225.54B Avg. Daily Volume: 41,463,029 52 Week Range: $43.61 – $68.09

4. Guaranty Bancshares, Inc. (GNTY): $33.38

Director James S. Bunch acquired 10,000 shares of this regional bank, paying $32.90 per share for a total amount of $329,040. Mr. Bunch increased his stake by 9.52% to 115,000 shares with this purchase.

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

P/E: 13.53 Forward P/E: 12.69 Industry P/E: 15.69
P/S: 3.67 Price/Book: 1.34 EV/EBITDA: N/A
Market Cap: $366.3M Avg. Daily Volume: 20,390 52 Week Range: $20.02 – $33.995

5. FuelCell Energy, Inc. (FCEL): $20.76

CEO Jason Few acquired 11,000 shares of this stationary fuel cell power plant company, paying $17.99 per share for a total amount of $197,890. Mr. Few increased his stake by 98.80% to 22,134 shares with this purchase.

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

P/E: N/A Forward P/E: -129.75 Industry P/E: 54.08
P/S: 94.44 Price/Book: 31.45 EV/EBITDA: -389.11
Market Cap: $6.69B Avg. Daily Volume: 71,936,129 52 Week Range: $1 – $25

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $258.33

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 266,197 shares for $276.39, generating $73.57 million from the sale. These shares were sold indirectly through a trust.
  • VP and General Counsel Jennifer Newstead sold 310 shares for $278.08, generating $86,205 from the sale.

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

P/E: 25.6 Forward P/E: 19.21 Industry P/E: 38.37
P/S: 8.56 Price/Book: 5.74 EV/EBITDA: 17.32
Market Cap: $735.64B Avg. Daily Volume: 19,687,379 52 Week Range: $137.1 – $304.67

2. Guardant Health, Inc. (GH): $155.5

Shares of this precision oncology company were sold by 2 insiders:

  • Chief Executive Officer Helmy Eltoukhy sold 160,886 shares for $158.94, generating $25.57 million from the sale.
  • Director Ian T. Clark sold 538 shares for $162.00, generating $87,156 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 Guardant Health, Inc. here.

P/E: N/A Forward P/E: -95.99 Industry P/E: 21.78
P/S: 57.3 Price/Book: 14.22 EV/EBITDA: -84.58
Market Cap: $15.55B Avg. Daily Volume: 1,075,283 52 Week Range: $55.9 – $168.52

3. Workhorse Group Inc. (WKHS): $34.32

Shares of this electric vehicles manufacturer were sold by 5 insiders:

  • Director Benjamin H. Samuels sold 299,997 shares for $30.00, generating $8.99 million from the sale.
  • CEO and President Duane Hughes sold 200,000 shares for $29.00, generating $5.8 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Operating Officer Robert Harry Willison sold 150,000 shares for $30.00, generating $4.5 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Gerald B. Budde sold 10,000 shares for $30.98, generating $309,800 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Controller Gregory T. Ackerson sold 6,445 shares for $37.50, generating $241,685 from the sale.

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

P/E: N/A Forward P/E: -90.32 Industry P/E: N/A
P/S: 5563.15 Price/Book: N/A EV/EBITDA: -191.44
Market Cap: $4.14B Avg. Daily Volume: 16,564,414 52 Week Range: $1.315 – $40.45

4. HealthEquity, Inc. (HQY): $83.55

Shares of this health information services company were sold by 2 insiders:

  • President and CEO Jon Kessler sold 150,000 shares for $85.23, generating $12.78 million from the sale.
  • EVP, Counsel & Secretary Delano Ladd sold 55,000 shares for $85.30, generating $4.69 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 HealthEquity, Inc. here.

P/E: 1856.67 Forward P/E: 48.58 Industry P/E: 21.78
P/S: 8.62 Price/Book: 4.74 EV/EBITDA: 32.9
Market Cap: $6.43B Avg. Daily Volume: 863,164 52 Week Range: $34.4 – $93.32

5. Ameresco, Inc. (AMRC): $56.09

Shares of this comprehensive energy services provider were sold by 3 insiders:

  • Director Joseph W. Sutton sold 98,200 shares for $60.84, generating $5.97 million from the sale. These shares were sold indirectly by Sutton Ventures LP.
  • EVP and General Counsel David J. Corrsin sold 55,280 shares for $58.85, generating $3.25 million from the sale.
  • President and CEO George P. Sakellaris sold 44,768 shares for $58.82, generating $2.63 million from the sale.

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

P/E: 52.18 Forward P/E: 45.98 Industry P/E: 164.78
P/S: 2.62 Price/Book: 5.8 EV/EBITDA: 32.56
Market Cap: $2.68B Avg. Daily Volume: 434,520 52 Week Range: $13.38 – $63.45

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: I hold a long position in B. Riley (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.

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