Welcome to edition 566 of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $5.99 million of stock purchased compared to $29.53 million in the week prior. Selling also decreased significantly to $1.15 billion compared to $1.68 billion in the week prior.
I didn’t recollect seeing insider buying dry down to just about $6 million in a week in a very long time but our memories are fallible and I noticed that insider buying also dipped to this level in late January. A combination of earnings season combined with a market that is close to a new high could be weighing down insider enthusiasm.
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 192.36. In other words, insiders sold more than 192 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 57.06.
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. Chipotle Mexican Grill, Inc. (CMG): $1492.03
Director Matt Carey acquired 673 shares of this restaurant chain, paying $1485.00 per share for a total amount of $999,405. Mr. Carey increased his stake by 4807.14% to 687 shares with this purchase.
Mr. Carey is the Executive Vice President and Chief Information Officer of The Home Depot and joined Chipotle’s board on March 30, 2021. New directors often tend to buy stock and I would not read much into this purchase.
You can view the list of recent insider transactions for Chipotle Mexican Grill, Inc. here.
|P/E: 104.54||Forward P/E: 46.47||Industry P/E: N/A|
|P/S: 6.65||Price/Book: 20.03||EV/EBITDA: 67.26|
|Market Cap: $42.01B||Avg. Daily Volume: 297,214||52 Week Range: $856.5 – $1579.52|
2. Associated Banc-Corp (ASB): $21.89
Director John F. Bergstrom acquired 29,500 shares of this regional bank, paying $21.65 per share for a total amount of $638,663. Mr. Bergstrom increased his stake by 46.82% to 92,508 shares with this purchase.
You can view the list of recent insider transactions for Associated Banc-Corp here.
|P/E: 10.07||Forward P/E: 13.94||Industry P/E: N/A|
|P/S: 2.92||Price/Book: 0.88||EV/EBITDA: N/A|
|Market Cap: $3.34B||Avg. Daily Volume: 1,410,634||52 Week Range: $11.13 – $23.95|
3. The Greenbrier Companies, Inc. (GBX): $47.24
Chairman & CEO William A. Furman acquired 10,000 shares of this Oregon based railroad freight car equipment company, paying $48.20 per share for a total amount of $481,968. Mr. Furman increased his stake by 1.78% to 572,518 shares with this purchase.
While his purchase last week was smaller than the 50,000 shares he purchased the week before, it is interesting to see Mr. Furman continue to buy shares. Mr. Furman also purchased 50,000 shares in February and we wrote the following after that 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.
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.
You can view the list of recent insider transactions for The Greenbrier Companies, Inc. here.
|P/E: 185.26||Forward P/E: 19.6||Industry P/E: 35.66|
|P/S: 0.74||Price/Book: 1.22||EV/EBITDA: 15.28|
|Market Cap: $1.55B||Avg. Daily Volume: 424,009||52 Week Range: $15.22 – $50.21|
4. Capstar Financial Holdings, Inc. (CSTR): $19.19
Chief Financial Officer Denis J. Duncan acquired 20,000 shares of this regional bank, paying $18.98 per share for a total amount of $379,600. Mr. Duncan increased his stake by 80.65% to 44,800 shares with this purchase.
You can view the list of recent insider transactions for Capstar Financial Holdings, Inc. here.
|P/E: 11.77||Forward P/E: 10.26||Industry P/E: 15.80|
|P/S: 3.41||Price/Book: 1.23||EV/EBITDA: N/A|
|Market Cap: $423.91M||Avg. Daily Volume: 72,850||52 Week Range: $9.01 – $19.25|
5. Business First Bancshares, Inc. (BFST): $23.77
Director John P. Ducrest acquired 4,550 shares of this regional bank, paying $23.93 per share for a total amount of $108,882. Mr. Ducrest increased his stake by inf% to 4,550 shares with this purchase.
You can view the list of recent insider transactions for Business First Bancshares, Inc. here.
|P/E: 12.7||Forward P/E: 11||Industry P/E: 15.80|
|P/S: 3.12||Price/Book: 1.19||EV/EBITDA: N/A|
|Market Cap: $494.05M||Avg. Daily Volume: 34,152||52 Week Range: $10 – $24.95|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. SITE Centers Corp. (SITC): $14.75
Director Alexander Otto sold 8,500,000 shares of this shopping center REIT for $14.44, generating $122.69 million from the sale.
SITE Centers is a mall REIT with 78 wholly owned shopping centers that are mostly anchored by a grocery store or a discount retailer. The company used to be known as DDR and changed its name to SITE Centers in late 2018 after spinning off a division of the company called Retail Value (RVI). During the retail armageddon of the last few years, DDR decided to spin-off some of its less desirable properties including several based in Puerto Rico in order to leave the parent much stronger.
Oddly enough, shortly after the spin, it was Retail Value that initially outperformed SITE Centers but that changed during the pandemic. SITE Centers has completely recovered to pre-pandemic levels while Retail Value is still down nearly 50%.
Mr. Otto is the CEO of ECE, a mall operator in Europe, and is personally estimated to be worth nearly $12 billion. He started buying DDR stock in 2014 and continued buying through 2018, significantly stepping up his purchases in 2018. It is interesting to see that he started selling shares in December 2020 but this is his largest sale yet as you can see here.
You can view the list of recent insider transactions for SITE Centers Corp. here.
|P/E: N/A||Forward P/E: 81.94||Industry P/E: 83.12|
|P/S: 6.73||Price/Book: 1.69||EV/EBITDA: 19.58|
|Market Cap: $3.11B||Avg. Daily Volume: 2,319,575||52 Week Range: $4.21 – $15.31|
2. Facebook, Inc. (FB): $324.9
COB and CEO Mark Zuckerberg sold 268,147 shares of Facebook for $302.83, generating $81.2 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: 27.84||Forward P/E: 22.15||Industry P/E: 36.02|
|P/S: 9.78||Price/Book: 6.91||EV/EBITDA: 19.16|
|Market Cap: $923.13B||Avg. Daily Volume: 19,611,665||52 Week Range: $198.76 – $331.81|
3. Snap Inc. (SNAP): $61.82
Shares of this camera company were sold by 2 insiders:
- Chief Technology Officer Robert C. Murphy sold 950,000 shares for $59.52, generating $56.55 million from the sale.
- Chief Executive Officer Evan Spiegel sold 250,000 shares for $60.63, generating $15.16 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Snap Inc. here.
|P/E: N/A||Forward P/E: 92.27||Industry P/E: 36.02|
|P/S: 33.47||Price/Book: 55.05||EV/EBITDA: -120.72|
|Market Cap: $94.18B||Avg. Daily Volume: 25,946,739||52 Week Range: $16.42 – $73.59|
4. Comcast Corporation (CMCSA): $56.15
Chairman of Board, President & CEO Brian L. Roberts sold 709,673 shares of this media and technology company for $55.20, generating $39.17 million from the sale. These shares were sold indirectly by various trusts.
You can view the list of recent insider transactions for Comcast Corporation here.
|P/E: 22.19||Forward P/E: 15.3||Industry P/E: 45.22|
|P/S: 2.48||Price/Book: 2.79||EV/EBITDA: 11.5|
|Market Cap: $257.97B||Avg. Daily Volume: 17,291,853||52 Week Range: $34.17 – $58.59|
5. HCA Healthcare, Inc. (HCA): $201.06
SVP & General Counsel Robert A. Waterman sold 147,534 shares of this health care services company for $200.68, generating $29.61 million from the sale.
You can view the list of recent insider transactions for HCA Healthcare, Inc. here.
|P/E: 15.02||Forward P/E: 13.27||Industry P/E: 23.12|
|P/S: 1.29||Price/Book: 279.64||EV/EBITDA: 9.58|
|Market Cap: $67.74B||Avg. Daily Volume: 1,621,334||52 Week Range: $91.21 – $205.58|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in SITE Centers (SITC). 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.