Insider Weekends: Richard Wallman’s Largest Purchase Of Roper Technologies In Over 10 Years

Welcome to edition 572 of Insider Weekends. Insider buying decreased last week with insiders purchasing $31.91 million of stock purchased compared to $46.04 million in the week prior. Selling also decreased to $2.17 billion compared to $2.26 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 went up to 67.99. In other words, insiders sold almost 68 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week when the ratio stood at 49.08.

I wouldn’t be particularly alarmed by this increase in the Sell/Buy ratio as most companies are entering their earnings related quiet periods and insider activity is likely to remain muted in coming weeks.

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. Asana, Inc. (ASAN): $46.47

President, CEO, & Chairman Dustin A. Moskovitz acquired 500,000 shares of this project management software company, paying $39.49 per share for a total amount of $19.74 million. Mr. Moskovitz increased his stake by 62.50% to 1,300,000 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: 57.71
P/S: 29.71 Price/Book: N/A EV/EBITDA: -40.05
Market Cap: $7.6B Avg. Daily Volume: 1,426,523 52 Week Range: $20.57 – $46.57

2. Lululemon Athletica Inc. (LULU): $338.3

Director Martha A. Morfitt acquired 4,800 shares of this apparel chain, paying $330.00 per share for a total amount of $1.58 million. Ms. Morfitt increased her stake by 5.62% to 90,154 shares with this purchase.

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

P/E: 62.78 Forward P/E: 40.81 Industry P/E: 68.54
P/S: 9.2 Price/Book: 16.69 EV/EBITDA: 36.29
Market Cap: $45.79B Avg. Daily Volume: 1,251,407 52 Week Range: $269.28 – $399.9

3. Roper Technologies, Inc. (ROP): $459.24

Director Richard F. Wallman acquired 2,000 shares of this diversified technology company, paying $453.25 per share for a total amount of $906,500. Mr. Wallman increased his stake by 3.54% to 58,508 shares with this purchase.

When you first look at Roper Technologies, it looks like the company is doing too many things in too many markets but as you dig deeper, you realize that this diversification is intentional and the company likes to focus on a large number of niche markets. As described by the company,

“Roper has built a family of leading niche businesses that provide engineered products, software, and services for diverse end markets.  By providing value-added solutions for critical customer processes, we generate high gross-margins that strong operating management converts to excess free cash flow.  In turn, we reinvest this cash into new growth drivers that lead to sustained profitable growth.”

This strategy has paid off for the company with EBITDA margins rising in recent years and approaching an all-time record of almost 36%. Return on equity (ROE) at 9.81% is lower than I would have expected but was over 20% in Q4 2019. This is the exactly the kind of company I expect to discover by looking at insider transactions and there is a high probability we might dive deeper into this company for our July 2021 Special Situations Newsletter spotlight idea for premium members.

Roper Technologies Strategy

Roper Technologies Strategy (Source: Company Website)

Mr. Wallman and his wife were both graduates of University of Chicago’s Booth School of Business in the 1970s and they donated $75 million to the school in 2017. The announcement of the gift provides some background on Mr. Wallman.

Richard Wallman graduated from Booth in 1974 and began his career with the Ford Motor Company. He served as the chief financial officer and senior vice president of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, from 1995 to 2003. Richard Wallman also served in senior financial positions with IBM and Chrysler Corporation.

He has served as a Director of Roper Technologies since 2007 and is also a Director of Extended Stay America (STAY), a company that is in the process of getting acquired by Blackstone and Starwood Capital in a $6 billion deal. As you can see from his insider purchases over the years across the various companies where he serves on the board of directors, this is his largest purchase of Roper Technologies in over 10 years.

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

P/E: 48.69 Forward P/E: 28.52 Industry P/E: 31.98
P/S: 8.47 Price/Book: 4.49 EV/EBITDA: 27.56
Market Cap: $48.33B Avg. Daily Volume: 443,553 52 Week Range: $362.9 – $460.39

4. WillScot Mobile Mini Holdings Corp. (WSC): $29.49

Director Mark S. Bartlett acquired 25,000 shares of this modular space and portable storage solutions provider, paying $28.03 per share for a total amount of $700,720. Mr. Bartlett increased his stake by 22.74% to 134,925 shares with this purchase.

You can view the list of recent insider transactions for WillScot Mobile Mini Holdings Corp. here.

P/E: N/A Forward P/E: 25.64 Industry P/E: 44.83
P/S: 4.41 Price/Book: 3.33 EV/EBITDA: 25.45
Market Cap: $6.78B Avg. Daily Volume: 1,497,861 52 Week Range: $11.67 – $30.38

5. UWM Holdings Corporation Class (UWMC): $10.22

Director Robert Verdun acquired 50,000 shares of this mortgage finance company, paying $9.13 per share for a total amount of $456,250. Mr. Verdun increased his stake by 45.05% to 161,000 shares with this purchase.

You can view the list of recent insider transactions for UWM Holdings Corporation Class here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 2.86 Price/Book: N/A EV/EBITDA: 1.73
Market Cap: $16.4B Avg. Daily Volume: 6,387,517 52 Week Range: $6.25 – $14.38

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

Notable Insider Sales:

1. Walmart Inc. (WMT): $140.75

Director Robson S. Walton sold 3,066,599 shares of Walmart for $140.20, generating $429.94 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 32.58 Forward P/E: 22.48 Industry P/E: 31.11
P/S: 0.7 Price/Book: 5.04 EV/EBITDA: 11.06
Market Cap: $394.4B Avg. Daily Volume: 8,066,846 52 Week Range: $117.01 – $153.66

2. Royal Caribbean Group (RCL): $90.09

Director Arne Alexander Wilhelmsen sold 721,614 shares of this cruise company for $94.97, generating $68.53 million from the sale. These shares were sold indirectly by A. WILHELMSEN AS.

You can view the list of recent insider transactions for Royal Caribbean Group here.

P/E: N/A Forward P/E: 50.05 Industry P/E: N/A
P/S: 105.17 Price/Book: 2.5 EV/EBITDA: -16.65
Market Cap: $22.93B Avg. Daily Volume: 3,885,095 52 Week Range: $45.06 – $99.24

3. Facebook, Inc. (FB): $331.26

COB and CEO Mark Zuckerberg sold 154,600 shares of Facebook for $331.64, generating $51.27 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: 28.38 Forward P/E: 21.78 Industry P/E: 34.48
P/S: 9.95 Price/Book: 7.04 EV/EBITDA: 19.62
Market Cap: $939.27B Avg. Daily Volume: 18,973,088 52 Week Range: $207.11 – $338.3

4. XPO Logistics, Inc. (XPO): $149.57

Chief Executive Officer Jacobs S. Bradley sold 202,154 shares of this supply chain solutions provider for $144.26, generating $29.16 million from the sale. These shares were sold indirectly by Jacobs Private Equity, LLC.

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

P/E: 90.05 Forward P/E: 20.8 Industry P/E: 32.07
P/S: 0.97 Price/Book: 6.03 EV/EBITDA: 16.36
Market Cap: $16.71B Avg. Daily Volume: 895,207 52 Week Range: $71.69 – $151.22

5. GrowGeneration Corp. (GRWG): $42.38

CEO Darren Lampert sold 186,245 shares of this retail hydroponic and organic gardening stores operator for $44.02, generating $8.19 million from the sale.

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

P/E: 164.26 Forward P/E: 59.69 Industry P/E: 23.51
P/S: 10.13 Price/Book: 7.08 EV/EBITDA: 104.87
Market Cap: $2.54B Avg. Daily Volume: 1,861,493 52 Week Range: $6.01 – $67.75

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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