Insider Weekends: More Buying By Insiders Of Retail Companies

Welcome to edition 578 of Insider Weekends. Insider buying increased last week with insiders purchasing $73.76 million of stock purchased compared to $31.92 million in the week prior. Selling increased significantly to $3.58 billion compared to $1.56 billion in the week prior.

A trend we have noticed in recent weeks is buying by insiders of retail focused companies and it is not surprising that insider buying by a board member of Bed, Bath & Beyond (BBBY) made the top of our list this week. Massive direct stimulus in the first half of 2021 that saw most qualified households receive stimulus checks of $600 and $1,400 per individual and an additional $1,400 per dependent left many consumers flush with cash. This influx combined with lower costs for certain segments of the population that continue to work from home and rising asset prices has resulted in the M2 money supply steadily increasing through the pandemic. This translated into a big uptick in sales for retailers who are benefiting from optimized online operations and the reopening of stores. With child care credit checks going out to many families through the rest of 2021, it is not surprising the previous CEO of Macy’s, Terry Lundgren, sees the strongest back to school season ever. Retail is likely to remain a bright spot for at least the next two quarters unless the Delta variant of COVID-19 gains tractions and triggers lockdowns.

FRED M2 Money Supply

FRED M2 Money Supply

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 a little to 48.57. In other words, insiders sold almost 49 times as much stock as they purchased. The Sell/Buy ratio this week was flat compared to the prior week when the ratio stood at 48.89.

Insider Sector Heat Map July 23, 2021

Insider Sector Heat Map July 23, 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. Bed Bath & Beyond Inc. (BBBY): $28.72

Director Harriet Edelman acquired 11,000 shares of this retail chain, paying $27.47 per share for a total amount of $302,153. Mr. Edelman increased his stake by 29.84% to 47,869 shares with this purchase.

You can view the list of recent insider transactions for Bed Bath & Beyond Inc. here.

P/E: 33.67 Forward P/E: 12.82 Industry P/E: 24.17
P/S: 0.3 Price/Book: 2.7 EV/EBITDA: 6.39
Market Cap: $3B Avg. Daily Volume: 7,766,328 52 Week Range: $10.09 – $53.9

2. ExlService Holdings, Inc. (EXLS): $106.86

Director Garen K. Staglin acquired 2,500 shares of this operations management and analytics services provider, paying $108.79 per share for a total amount of $271,975. Mr. Staglin increased his stake by 8.65% to 31,399 shares with this purchase.

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

P/E: 37.25 Forward P/E: 24.12 Industry P/E: 64.36
P/S: 3.67 Price/Book: 4.93 EV/EBITDA: 20.96
Market Cap: $3.58B Avg. Daily Volume: 151,776 52 Week Range: $59.97 – $110.44

3. Ault Global Holdings, Inc. (DPW): $2.35

Executive Chairman Milton C. Ault III acquired 80,000 shares of this electrical equipment & parts company, paying $2.34 per share for a total amount of $187,458. These shares were purchased indirectly by Ault & Company, Inc.

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

P/E: N/A Forward P/E: N/A Industry P/E: 53.55
P/S: 3.71 Price/Book: 0.67 EV/EBITDA: -29.73
Market Cap: $116.97M Avg. Daily Volume: 5,291,457 52 Week Range: $1.44 – $10.94

4. Air T, Inc. (AIRT): $28.82

CEO Nicholas John Swenson acquired 6,838 shares of this air freight & logistics company, paying $27.03 per share for a total amount of $184,851. These shares were purchased indirectly by AO Partners, LLC.

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

P/E: N/A Forward P/E: N/A Industry P/E: 26.94
P/S: 0.47 Price/Book: 6.05 EV/EBITDA: -29.1
Market Cap: $83.05M Avg. Daily Volume: 6,230 52 Week Range: $8.95 – $42.93

5. Jefferies Financial Group Inc. (JEF): $32.52

Director Melissa Weiler acquired 4,000 shares of this financial conglomerate, paying $32.00 per share for a total amount of $128,000.

This is the second insider purchase we have seen at Jefferies in the last 5 years, with the first one being a well timed purchase by Jefferies’ President for $16.27 last July. Ms. Weiler joined Jefferies’ board of directors last month. Since new directors often tend to buy shares, I would not read much into this purchase. However the pace of Jefferies’ buybacks and the fact that a large number of insiders have exercised options without selling them is interesting.

Jefferies Change In Shares Outstanding

Jefferies Change In Shares Outstanding (source: Inside Arbitrage data)

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

P/E: 5.86 Forward P/E: 10.66 Industry P/E: 15.68
P/S: 0.92 Price/Book: 0.8 EV/EBITDA: 12.74
Market Cap: $8.03B Avg. Daily Volume: 2,102,417 52 Week Range: $16 – $35.69

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $369.79

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 386,500 shares for $341.19, generating $131.87 million from the sale. These shares were sold indirectly by various entities.
  • VP and General Counsel Jennifer Newstead sold 250 shares for $338.80, generating $84,700 from the sale.

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

P/E: 31.68 Forward P/E: 24.3 Industry P/E: 36.04
P/S: 11.11 Price/Book: 7.86 EV/EBITDA: 21.95
Market Cap: $1.05T Avg. Daily Volume: 17,018,695 52 Week Range: $229 – $375.33

2. UnitedHealth Group Incorporated (UNH): $417.7

Shares of this diversified health care company were sold by 3 insiders:

  • Director Stephen J. Hemsley sold 60,000 shares for $420.62, generating $25.24 million from the sale.
  • Director Richard T. Burke sold 8,000 shares for $414.30, generating $3.31 million from the sale. These shares were purchased indirectly through a partnership.
  • CEO, UHG Andrew Witty sold 6,000 shares for $414.15, generating $2.48 million from the sale.

You can view the list of recent insider transactions for UnitedHealth Group Incorporated here.

P/E: 27.59 Forward P/E: 19.55 Industry P/E: 26.18
P/S: 1.45 Price/Book: 5.54 EV/EBITDA: 18.49
Market Cap: $394.18B Avg. Daily Volume: 2,913,430 52 Week Range: $289.64 – $425.98

3. Floor & Decor Holdings, Inc. (FND): $120.18

Shares of this home improvement retail company were sold by 4 insiders:

  • Director George Vincent West sold 109,090 shares for $110.00, generating $11.99 million from the sale. These shares were sold indirectly by American West Investment Corporation.
  • Chief Executive Officer Thomas V. Taylor sold 101,000 shares for $112.57, generating $11.37 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Norman Axelrod sold 35,000 shares for $115.00, generating $4.03 million from the sale.
  • EVP, Store Operations Steven Alan Denny sold 5,184 shares for $110.00, generating $570,240 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 Floor & Decor Holdings, Inc. here.

P/E: 54.63 Forward P/E: 44.18 Industry P/E: 24.17
P/S: 4.75 Price/Book: 11.64 EV/EBITDA: 37.61
Market Cap: $12.61B Avg. Daily Volume: 790,633 52 Week Range: $64.53 – $120.616

4. Snowflake Inc. (SNOW): $264.92

Shares of this cloud-based data platform  were sold by 3 insiders:

  • President of Products Benoit Dageville sold 73,636 shares for $251.69, generating $18.53 million from the sale. These shares were sold indirectly by a trust.
  • CEO and Chairman Frank Slootman sold 31,546 shares for $254.37, generating $8.02 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Mark Garrett sold 3,459 shares for $254.59, generating $880,627 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 Snowflake Inc. here.

P/E: N/A Forward P/E: -509.46 Industry P/E: 64.36
P/S: 110.15 Price/Book: 15.8 EV/EBITDA: -116.71
Market Cap: $78.44B Avg. Daily Volume: 4,323,542 52 Week Range: $184.71 – $429

5. Bentley Systems, Incorporated (BSY): $60.94

Director Barry J. Bentley sold 422,402 shares of this infrastructure engineering software solutions provider for $59.53, generating $25.15 million from the sale.

You can view the list of recent insider transactions for Bentley Systems, Incorporated here.

P/E: 121.64 Forward P/E: N/A Industry P/E: 61.57
P/S: 20.35 Price/Book: 47.13 EV/EBITDA: 69.29
Market Cap: $16.86B Avg. Daily Volume: 1,882,741 52 Week Range: $27 – $67

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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