Insider Weekends: Insider Selling Eclipses $3 Billion

Welcome to edition 564 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $141.21 million of stock purchased compared to $44.09 million in the week prior. Such a large spike in insider buying during an earnings related quiet period seems unusual and I found that a large portion of the buying was related to a privately negotiated $113.18 million purchase between electric utility Evergy (EVRG) and C. John Wilder’s Bluescape Energy Partners. Removing this transaction drops the insider buying to just a gaggle of uninteresting purchases that total less than $28 million.

The quiet period did not discourage insiders from selling and selling increased to $3.16 billion compared to $1.98 billion in the week prior. With the P/E of the S&P 500 at nearly 47 (as of 4/9/2021 according to WSJ) and the S&P 500 at a new record high, it is not surprising to see that the pace of insider selling has been elevated the last few weeks.

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 22.37. In other words, insiders sold more than 22 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 44.99.

Insider Sector Heat Map April 16, 2021

Insider Sector Heat Map April 16, 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. Landec Corporation (LNDC): $11.2

Shares of this packaged foods company were acquired by 3 insiders:

  • Vice President James G. Hall acquired 10,000 shares, paying $10.62 per share for a total amount of $106,200. Mr. Hall increased his stake by 34.30% to 39,151 shares with this purchase.
  • Chief Executive Officer Albert D. Bolles acquired 9,000 shares, paying $10.61 per share for a total amount of $95,490. Mr. Bolles increased his stake by 24.89% to 45,152 shares with this purchase.
  • Chief Financial Officer John D. Morberg acquired 6,000 shares, paying $10.60 per share for a total amount of $63,600. Mr. Morberg increased his stake by 63.83% to 15,400 shares with this purchase.

Insiders of Landec have been buyers of the stock for years and the company has little to show for it. Insider buying often helps me discover companies I might not otherwise look at but it is just the starting point in my research.

The current CEO of Landec, Dr. Albert Bolles, stepped into the role in May 2019 and had served on the board since May 2014. He was previously the executive vice president, chief technology and operations officer of ConAgra Foods and vice president, worldwide R&D for PepsiCo Beverage before that. Given this wealth of experience and the long tenure on the board of directors, one would have expected a turn around under his leadership but that has not been the case.

The company reported a net loss $1.31 in fiscal 2020 ended May 2020 and a loss in each of the last 8 quarters. The stock is up a little more than 10% since he took the reins. Maybe this newfound optimism and insider buying is on account of the new CFO John Morberg who joined the company in January of this year. According to the company,

Mr. Morberg brings over 25 years of corporate finance and executive leadership experience with both public and private companies, including as a CEO, CFO, general counsel and board member. Most recently, he was CFO and General Counsel for BL Restaurant Holdings, LLC, a national restaurant chain. Previously, over a ten-year tenure at Garden Fresh Restaurant Corp, he held various roles, including as the CEO, CFO and board member. He also served as CFO of DEI Holdings, Inc., through its initial public offering and through the early stages of being a public company, and worked for eight-years as Vice President and Controller of PETCO. Mr. Morberg began his career at KPMG.

Mr. Morberg has a Juris Doctor from the University of the Pacific, McGeorge School of Law and a BBA, Accounting from the University of San Diego. He is a member of the State Bar of California and holds a CPA license (inactive).

I have analyzed the company several times over the years and decided not to buy every time I looked at them. A new management team and insider buying notwithstanding, I would like to see some positive momentum in the business before I would get interested in Landec.

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

P/E: N/A Forward P/E: 124.44 Industry P/E: 24.40
P/S: 0.59 Price/Book: 1.61 EV/EBITDA: 35.35
Market Cap: $331.46M Avg. Daily Volume: 137,791 52 Week Range: $7.48 – $12.24

2. Super League Gaming, Inc. (SLGG): $5.58

Director Michael R. Keller acquired 17,000 shares of this video gaming and esports entertainment platform, paying $6.06 per share for a total amount of $103,020. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Super League Gaming, Inc. here.

P/E: N/A Forward P/E: -11.16 Industry P/E: 43.23
P/S: 62.51 Price/Book: 7.89 EV/EBITDA: -6.55
Market Cap: $129.01M Avg. Daily Volume: 10,023,112 52 Week Range: $1.63 – $11.2

3. Cyclo Therapeutics, Inc. (CYTH): $7.05

Director Francis Patrick Ostronic acquired 15,000 shares of this biotech company, paying $6.68 per share for a total amount of $100,250. Mr. Ostronic increased his stake by 24.37% to 76,559 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 49.11 Price/Book: N/A EV/EBITDA: -3.43
Market Cap: $44.37M Avg. Daily Volume: 824,350 52 Week Range: $3 – $27

4. Greenwich LifeSciences, Inc. (GLSI): $33.64

CEO and CFO Snehal Patel acquired 2,700 shares of this biotech company, paying $36.98 per share for a total amount of $99,853. Mr. Patel increased his stake by 0.23% to 1,189,539 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: -217.07
Market Cap: $432.17M Avg. Daily Volume: 679,670 52 Week Range: $3.262 – $158.07

5. Hudson Global, Inc. (HSON): $17.49

Chief Executive Officer Jeffrey E. Eberwein acquired 2,500 shares of this staffing & employment services provider, paying $17.81 per share for a total amount of $44,525. Mr. Eberwein increased his stake by 2.03% to 125,725 shares with this purchase.

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

P/E: N/A Forward P/E: 17.15 Industry P/E: 46.59
P/S: 0.46 Price/Book: 1.37 EV/EBITDA: -8.81
Market Cap: $46.96M Avg. Daily Volume: 8,248 52 Week Range: $8.38 – $19

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

Notable Insider Sales:

1. Ulta Beauty, Inc. (ULTA): $330.71

Director Charles Heilbronn sold 436,668 shares of this beauty retailer for $323.64, generating $141.32 million from the sale. These shares were sold indirectly by Mousseluxe SARL.

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

P/E: 106.34 Forward P/E: 27.47 Industry P/E: 39.29
P/S: 3.02 Price/Book: 9.31 EV/EBITDA: 27.75
Market Cap: $18.59B Avg. Daily Volume: 822,064 52 Week Range: $186.01 – $351

2. Facebook, Inc. (FB): $306.18

COB and CEO Mark Zuckerberg sold 340,000 shares of Facebook for $310.28, generating $105.49 million from the sale. These shares were sold indirectly by various entities.

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

P/E: 30.34 Forward P/E: 22.65 Industry P/E: 43.23
P/S: 10.12 Price/Book: 6.8 EV/EBITDA: 20.77
Market Cap: $869.94B Avg. Daily Volume: 20,083,025 52 Week Range: $168.34 – $315.88

3. Fidelity National Financial, Inc. (FNF): $44.63

Shares of this insurance company were sold by 2 insiders:

  • Director William P. Foley sold 1,000,000 shares for $43.45, generating $43.45 million from the sale.
  • EVP, Chief Legal Officer Peter T. Sadowski sold 25,000 shares for $43.89, generating $1.09 million from the sale.

You can view the list of recent insider transactions for Fidelity National Financial, Inc. here.

P/E: 8.94 Forward P/E: 9.5 Industry P/E: 17.34
P/S: 1.2 Price/Book: 1.56 EV/EBITDA: 5.95
Market Cap: $12.99B Avg. Daily Volume: 2,212,459 52 Week Range: $23.58 – $45.03

4. NovoCure Limited (NVCR): $192.5

Shares of this oncology company were sold by 4 insiders:

  • Chief Executive Officer Asaf Danziger sold 97,973 shares for $196.34, generating $19.24 million from the sale.
  • Executive Chairman William F. Doyle sold 95,000 shares for $199.55, generating $18.96 million from the sale.
  • Director Gabriel Leung sold 6,000 shares for $198.84, generating $1.19 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Medical Officer Ely Benaim sold 5,958 shares for $200.00, generating $1.19 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 NovoCure Limited here.

P/E: 1069.44 Forward P/E: 437.5 Industry P/E: 68.65
P/S: 39.88 Price/Book: 41.34 EV/EBITDA: 501.07
Market Cap: $19.71B Avg. Daily Volume: 1,026,151 52 Week Range: $55.4 – $218.09

5. Entegris, Inc. (ENTG): $117.38

Shares of this semiconductor equipment company were sold by 3 insiders:

  • President & CEO Bertrand Loy sold 300,000 shares for $118.58, generating $35.57 million from the sale.
  • SVP, Business Development Corey Rucci sold 16,262 shares for $120.82, generating $1.96 million from the sale. 11,202 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Director James P. Lederer sold 7,000 shares for $121.76, generating $852,320 from the sale.

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

P/E: 54.34 Forward P/E: 34.02 Industry P/E: 36.30
P/S: 8.54 Price/Book: 11.48 EV/EBITDA: 31.12
Market Cap: $15.88B Avg. Daily Volume: 953,295 52 Week Range: $46.93 – $126.41

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 Fidelity National Financial (FNF). 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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