Insider Weekends: William Furman of Greenbrier Purchases 50,000 Shares

Welcome to edition 555 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $97.58 million of stock purchased compared to $30.66 million in the week prior. Selling also increased significantly with insiders selling $3.45 billion of stock last week compared to $1.17 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 35.38. In other words, insiders sold more than 35 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 71.42.

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. The Greenbrier Companies, Inc. (GBX): $45.98

Chairman & CEO William A. Furman acquired 50,000 shares of this Oregon based railroad freight car equipment company, paying $43.57 per share for a total amount of $2.18 million. Mr. Furman increased his stake by 10.81% to 512,518 shares with this purchase.

Greenbrier manufactures, leases and manages railcars in North America, Europe and Brazil. The first time I came across Greenbrier was in the summer of 2011 after noticing a cluster of insider purchases by Mr. Furman and another director in the low teens. He also made an opportunistic purchase last May when he picked up 100,000 shares at an average price of $16.52 as you can see here. It is encouraging to see him “average up” at much higher prices, especially considering he was a seller at these prices back in 2017.

On the business front, Greenbrier has been a mixed bag. While the company has done a great job of reducing debt over the last ten years and using debt judiciously for acquisitions, earnings have declined in four out of the last five years. Over those five years, gross margins have declined from 22.8% in fiscal 2016 to 13.2% for fiscal 2020 ended August 2020.

GBX Revenue and Gross Margins

GBX Revenue and Gross Margins (source: GBX Q1 2021 Earnings Presentation)

Part of this is related to the decline in demand for railcars since 2015 as you can see from the following slide from Greenbrier’s investor presentation. The good news is that this trend is expected to reverse with demand projected to start improving next year. With the Biden administration blocking oil pipeline construction, more oil is likely to be transported by rail and this would benefit Greenbrier. So would a post-pandemic rebound in economic activity. There have been concerns about capital allocation and succession planning at Greenbrier as Mr. Furman is 76 years old and is expected to retire in September 2022.

GBX Railcar Demand Actual and Estimated

GBX Railcar Demand Actual and Estimated (source: GBX Investor Presentation)

You can view the list of recent insider transactions for The Greenbrier Companies, Inc. here.

P/E: 48.86 Forward P/E: 21.09 Industry P/E: 35.36
P/S: 0.62 Price/Book: 1.18 EV/EBITDA: 9.57
Market Cap: $1.51B Avg. Daily Volume: 347,574 52 Week Range: $12.89 – $46.75

2. Dun & Bradstreet Holdings, Inc. (DNB): $23.49

Shares of this commercial data, analytics provider were acquired by 2 insiders:

  • Chief Executive Officer Anthony M. Jabbour acquired 42,900 shares, paying $23.26 per share for a total amount of $998,038. These shares were purchased indirectly through a trust.
  • Chief Financial Officer Bryan T. Hipsher acquired 5,000 shares, paying $23.30 per share for a total amount of $116,500. Mr. Hipsher increased his stake by 125.00% to 9,000 shares with this purchase.

You can view the list of recent insider transactions for Dun & Bradstreet Holdings, Inc. here.

P/E: N/A Forward P/E: 20.43 Industry P/E: 45.49
P/S: 5.72 Price/Book: 2.82 EV/EBITDA: 19.9
Market Cap: $9.94B Avg. Daily Volume: 1,563,416 52 Week Range: $22.62 – $29.548

3. CuriosityStream Inc. (CURI): $18.69

Director John S. Hendricks acquired 74,000 shares of this media and entertainment company, paying $13.50 per share for a total amount of $999,000. Mr. Hendricks increased his stake by 9.00% to 896,157 shares with this purchase.

Mr. Hendricks also purchased shares in December and since we wrote about that purchase less than two months ago, the stock is up an astounding 77%. Mr. Hendricks is the founder and former chairman of Discovery (DISCA) and also founded CuriosityStream, which focuses on documentaries.

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: 25.55 Price/Book: N/A EV/EBITDA: -18.41
Market Cap: $893.04M Avg. Daily Volume: 911,032 52 Week Range: $7.44 – $21.17

4. Affiliated Managers Group, Inc. (AMG): $147.9

Shares of this asset management company were acquired by 2 insiders:

  • President and CEO Jay C. Horgen acquired 4,000 shares, paying $136.23 per share for a total amount of $544,920. Mr. Horgen increased his stake by 3.03% to 136,026 shares with this purchase.
  • Director Reuben Jeffery III acquired 2,500 shares, paying $145.53 per share for a total amount of $363,825. Mr. Jeffery increased his stake by 16.67% to 17,500 shares with this purchase.

You can view the list of recent insider transactions for Affiliated Managers Group, Inc. here.

P/E: 34.16 Forward P/E: 8.31 Industry P/E: 20.41
P/S: 3.31 Price/Book: 2.39 EV/EBITDA: 13.04
Market Cap: $6.71B Avg. Daily Volume: 411,400 52 Week Range: $44.37 – $148.37

5. Calix, Inc. (CALX): $36.80

Director Donald J. Listwin acquired 20,000 shares of this cloud and software platforms provider, paying $35.75 per share for a total amount of $715,000. These shares were purchased indirectly by No Mas Ninos, L.P.

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

P/E: 68.15 Forward P/E: 30.67 Industry P/E: 46.59
P/S: 4.20 Price/Book: 8.13 EV/EBITDA: 37.91
Market Cap: $2.273B Avg. Daily Volume: 883,080 52 Week Range: $5.61 – $38.26

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

Notable Insider Sales:

1. Penn National Gaming, Inc. (PENN): $118.82

Shares of this casinos & gaming company were sold by 3 insiders:

  • Chairman Emeritus Peter M. Carlino sold 3,000,000 shares for $123.80, generating $371.4 million from the sale. These shares were sold indirectly by various trusts.
  • Director Saul Reibstein sold 10,000 shares for $124.98, generating $1.25 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Kohn Barbara Shattuck sold 3,100 shares for $120.24, generating $372,744 from the sale.

You can view the list of recent insider transactions for Penn National Gaming, Inc. here.

P/E: N/A Forward P/E: 46.05 Industry P/E: N/A
P/S: 4.74 Price/Book: 7.03 EV/EBITDA: 41.08
Market Cap: $18.46B Avg. Daily Volume: 4,358,967 52 Week Range: $3.75 – $129

2. Guardant Health, Inc. (GH): $179.1

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

  • Chairman, President and COO Amirali Talasaz sold 754,036 shares for $163.56, generating $123.33 million from the sale. These shares were sold indirectly by Talasaz Investments.
  • Director Stanley J. Meresman sold 4,934 shares for $162.71, generating $802,811 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: -110.56 Industry P/E: N/A
P/S: 65.99 Price/Book: 16.38 EV/EBITDA: -91.25
Market Cap: $17.91B Avg. Daily Volume: 1,104,980 52 Week Range: $55.9 – $181.07

3. Monolithic Power Systems, Inc. (MPWR): $385.92

Shares of this semiconductor company were sold by 6 insiders:

  • CEO Michael Hsing sold 86,695 shares for $369.44, generating $32.03 million from the sale.
  • Sr. V.P.of Sales and Marketing Maurice Sciammas sold 46,366 shares for $372.33, generating $17.26 million from the sale. These shares were sold indirectly through a trust.
  • President of MPS Asia Operations Deming Xiao sold 17,451 shares for $367.88, generating $6.42 million from the sale.
  • VP & General Counsel Saria Tseng sold 17,450 shares for $367.88, generating $6.42 million from the sale.
  • Director James C. Moyer sold 15,000 shares for $374.23, generating $5.61 million from the sale.
  • CFO Theodore Blegen sold 13,932 shares for $367.71, generating $5.12 million from the sale.

You can view the list of recent insider transactions for Monolithic Power Systems, Inc. here.

P/E: 110.26 Forward P/E: 57.17 Industry P/E: 37.95
P/S: 20.69 Price/Book: 18.07 EV/EBITDA: 88.67
Market Cap: $17.47B Avg. Daily Volume: 643,211 52 Week Range: $130.12 – $406.75

4. Facebook, Inc. (FB): $270.5

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 223,750 shares for $268.17, generating $60 million from the sale. These shares were sold indirectly by various entities.
  • VP and General Counsel Jennifer Newstead sold 429 shares for $267.25, generating $114,650 from the sale.

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

P/E: 26.81 Forward P/E: 20.01 Industry P/E: 39.38
P/S: 8.96 Price/Book: 6.01 EV/EBITDA: 18.2
Market Cap: $770.29B Avg. Daily Volume: 18,081,959 52 Week Range: $137.1 – $304.67

5. Align Technology, Inc. (ALGN): $609.58

Shares of this medical device company were sold by 2 insiders:

  • Director George J. Morrow sold 15,000 shares for $624.60, generating $9.37 million from the sale.
  • Director Warren S. Thaler sold 14,206 shares for $613.78, generating $8.72 million from the sale.

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

P/E: 27.2 Forward P/E: 53.43 Industry P/E: 73.72
P/S: 19.44 Price/Book: 14.86 EV/EBITDA: 98.51
Market Cap: $48.07B Avg. Daily Volume: 526,548 52 Week Range: $127.88 – $634.46

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.

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