Insider Weekends: Renewed Retail Confidence

A couple of trends we have noticed in recent weeks is renewed confidence among retailers that manifested itself through increased stock buybacks and insiders of retail companies buying stock on the open market. In our September 2021 Special Situations Newsletter we wrote about buybacks in the retail space and an excerpt from that newsletter is given below:

The retail sector that had been pretty much given up for dead pre-pandemic is staging a strong comeback fueled by pent-up demand from stimulus checks, strong employment and their omnichannel transformation. In fact things are so good that I was surprised to see retailer after retailer announce large buyback programs recently.

  • On August 18, Target (TGT) announced a $15 billion buyback program that amounted to more than 12% of the market cap at the time of announcement.
  • Williams-Sonoma, a retailer I had briefly considered as a short candidate way back in the financial crisis of 2008-2009 and decided against shorting because it was such a well run company, recently announced a $1.25 billion buyback amounting to 9.75% of its market cap.
  • Macy’s, which by market cap is just about 5% of Target’s size, announced its own $500 million buyback amounting to 7.4% of its market cap.
  • Guess (GES) announced a $200 million buyback translating to 12.76% of its market cap.

These buybacks came to mind as I looked at the list of insider purchases from last week, which included buying by insiders of Designer Brands (DBI), the newly reorganized post-bankruptcy Tuesday Morning (TUEM) and Goedeker (GOED). The story behind Goedeker is so wild and fascinating that I decided to extend our notable insider buys list to six this week instead of our usual five notable buys. To understand the Goedecker and its new CEO Albert Fouerti’s nearly $1 million purchase check out this YouTube video of Yet Another Value Podcast by Andrew Walker of Rangeley Capital.

Welcome to edition 585 of Insider Weekends. Insider buying decreased last week with insiders purchasing $87.61 million of stock purchased compared to $116.91 million in the week prior. Selling increased to $3.24 billion compared to $2.49 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 36.94. In other words, insiders sold almost 37 times as much stock as they purchased. The Sell/Buy ratio this week was unfavorable compared to the prior week when the ratio stood at 21.36.

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. Oscar Health, Inc. (OSCR): $17.5

Shares of this health insurance products and services provider were acquired by 2 insiders:

  • Co-Founder and Vice Chairman Joshua Kushner acquired 1,911,333 shares, paying $17.67 per share for a total amount of $33.77 million. These shares were purchased indirectly by Thrive Capital Partners.
  • Chief Executive Officer Mario Schlosser acquired 57,300 shares, paying $17.53 per share for a total amount of $1 million.

Mr. Kushner also purchased shares of Oscar Health last week and we wrote the following in our last insider weekends post,

We also saw insider buying of online health insurance company Oscar Health (OSCR) by its co-founder Joshua Kushner. The purchase was done indirectly through the venture capital firm Thrive Capital, which was an early investor in Instagram and counted Jared Kusher as one of its investors. Oscar Health went public at $39 a share in March 2021 and has lost more than half its value since then. Mr. Kushner and Thrive Capital started buying shares when they dipped below $13 in late August.

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

P/E: N/A Forward P/E: -11.29 Industry P/E: 10.66
P/S: 3.31 Price/Book: 2.09 EV/EBITDA: -3.47
Market Cap: $3.63B Avg. Daily Volume: 1,176,693 52 Week Range: $12.06 – $37

2. Continental Resources, Inc. (CLR): $41.97

Director Harold Hamm acquired 261,709 shares of this oil and natural gas exploration and production company, paying $41.99 per share for a total amount of $10.99 million. Mr. Hamm increased his stake by 1.95% to 13,691,717 shares with this purchase.

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

P/E: 40.24 Forward P/E: 12.03 Industry P/E: 45.75
P/S: 4.05 Price/Book: 2.3 EV/EBITDA: 7.02
Market Cap: $15.43B Avg. Daily Volume: 1,775,109 52 Week Range: $11.09 – $43.67

3. Tuesday Morning Corporation (TUEM): $2.25

Shares of this off-price retailer were acquired by 4 insiders:

  • CEO Fred Hand acquired 738,611 shares, paying $1.73 per share for a total amount of $1.28 million. Mr. Hand increased his stake by 26.67% to 3,507,824 shares with this purchase.
  • COO Marc Katz acquired 150,000 shares, paying $1.71 per share for a total amount of $256,725.
  • EVP & CIO William Baumann acquired 100,000 shares, paying $1.71 per share for a total amount of $171,000.
  • CMO Paul Metcalf acquired 100,000 shares, paying $1.68 per share for a total amount of $168,000. Mr. Metcalf increased his stake by 51.28% to 295,000 shares with this purchase.

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

P/E: 47.87 Forward P/E: 5.23 Industry P/E: 17.11
P/S: 0.28 Price/Book: 2.7 EV/EBITDA: -19.01
Market Cap: $193.35M Avg. Daily Volume: 1,142,900 52 Week Range: $1 – $5.01

4. BTRS Holdings Inc. (BTRS): $10.97

Shares of this cloud-based payment processing solutions provider were acquired by 3 insiders:

  • Chief Executive Officer Flint A. Lane acquired 100,000 shares, paying $10.14 per share for a total amount of $1.01 million. Mr. Lane increased his stake by 0.57% to 17,614,217 shares with this purchase.
  • Chief Information Officer Joe Eng acquired 47,938 shares, paying $10.56 per share for a total amount of $506,225. These shares were purchased indirectly through a trust.
  • Chief Financial Officer Mark L. Shifke acquired 29,752 shares, paying $10.13 per share for a total amount of $301,414. Mr. Shifke increased his stake by 18.32% to 192,126 shares with this purchase.

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

P/E: N/A Forward P/E: -60.94 Industry P/E: N/A
P/S: 14.1 Price/Book: 5.34 EV/EBITDA: -78.86
Market Cap: $1.74B Avg. Daily Volume: 1,100,485 52 Week Range: $9.83 – $19.76

5. Asana, Inc. (ASAN): $118.26

President, CEO, & Chair Dustin A. Moskovitz acquired 13,915 shares of this work management platform, paying $100.00 per share for a total amount of $1.39 million. Mr. Moskovitz increased his stake by 0.30% to 4,713,915 shares with this purchase.

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

P/E: N/A Forward P/E: -117.09 Industry P/E: 62.29
P/S: 74.12 Price/Book: 77.8 EV/EBITDA: -98.65
Market Cap: $21.75B Avg. Daily Volume: 2,471,581 52 Week Range: $20.57 – $121.38

6. 1847 Goedeker Inc. (GOED): $3.07

Chief Executive Officer Albert Fouerti acquired 330,000 shares of this e-commerce platform, paying $2.95 per share for a total amount of $972,345.

You can view the list of recent insider transactions for 1847 Goedeker Inc. here.

P/E: N/A Forward P/E: 3.37 Industry P/E: 47.17
P/S: 3.03 Price/Book: 1.64 EV/EBITDA: -42.12
Market Cap: $326.61M Avg. Daily Volume: 6,833,587 52 Week Range: $1.77 – $17.75

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $364.72

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 386,500 shares for $376.84, generating $145.65 million from the sale. These shares were sold indirectly through various entities.
  • Chief Legal Officer Jennifer Newstead sold 250 shares for $377.29, generating $94,323 from the sale.

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

P/E: 27.08 Forward P/E: 22.67 Industry P/E: 30.61
P/S: 9.81 Price/Book: 7.46 EV/EBITDA: 19.21
Market Cap: $1.03T Avg. Daily Volume: 13,640,031 52 Week Range: $244.13 – $384.33

2. Walmart Inc. (WMT): $144.73

Director Robson S. Walton sold 679,000 shares of Walmart for $145.12, generating $98.54 million from the sale. These shares were sold indirectly by a trust.

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

P/E: 40.73 Forward P/E: 21.96 Industry P/E: 32.42
P/S: 0.71 Price/Book: 5.02 EV/EBITDA: 11.1
Market Cap: $403.58B Avg. Daily Volume: 7,680,240 52 Week Range: $126.28 – $153.66

3. Alphabet Inc. (GOOG): $2829.27

Shares of Alphabet were sold by 2 insiders:

  • Director Sergey Brin sold 27,778 shares for $2889.20, generating $80.26 million from the sale.
  • Chief Executive Officer Sundar Pichai sold 3,000 shares for $2863.38, generating $8.59 million from the sale.

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

P/E: 30.69 Forward P/E: 26.7 Industry P/E: 30.61
P/S: 8.54 Price/Book: 7.95 EV/EBITDA: 24.06
Market Cap: $1.88T Avg. Daily Volume: 1,053,515 52 Week Range: $1406.55 – $2936.41

4. BeiGene, Ltd. (BGNE): $403.14

Shares of this biotech company were sold by 2 insiders:

  • Chief Executive Officer John Oyler sold 411,838 shares for $82.04, generating $33.79 million from the sale.
  • CMO, Hematology Jane Huang sold 12,901 shares for $358.14, generating $4.62 million from the sale.

You can view the list of recent insider transactions for BeiGene, Ltd. here.

P/E: N/A Forward P/E: -35.3 Industry P/E: N/A
P/S: 39.78 Price/Book: 10.36 EV/EBITDA: -24.91
Market Cap: $37.67B Avg. Daily Volume: 358,790 52 Week Range: $219.2 – $426.56

5. C3.ai, Inc. (AI): $50.12

Shares of this enterprise artificial intelligence (AI) software company were sold by 3 insiders:

  • Chief Executive Officer Thomas M. Siebel sold 640,866 shares for $49.13, generating $31.49 million from the sale. These shares were sold indirectly by a trust.
  • Director Patricia A. House sold 100,000 shares for $50.66, generating $5.07 million from the sale. These shares were sold indirectly by a trust.
  • Chief Product Officer Houman Behzadi sold 30,000 shares for $50.88, generating $1.53 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 C3.ai, Inc. here.

P/E: N/A Forward P/E: -53.89 Industry P/E: 62.29
P/S: 26.74 Price/Book: 4.99 EV/EBITDA: -45.98
Market Cap: $5.22B Avg. Daily Volume: 2,954,754 52 Week Range: $44.35 – $183.9

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 and Plus 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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