Insider Weekends: Inflation Takes a Bite Out of a Potato Company

One of the things I look forward to each week is the potential discovery of a new idea on account of insider buying. Every once in a while, especially during earnings related quiet periods, we encounter a week where the insider purchases are lackluster. This happens to be one of those weeks where the only company that appeared to be mildly interesting was an Idaho based potato products company. Food products companies for the most part sport low single digit margins and slow growth unless they are riding the wave of a new trend (fake meat or oat milk anyone?). Lamb Weston Holdings (LW) is no exception, delivering net income of just $30 million (a decline of 67% year-over-year) on sales of nearly $1 billion in its recently reported fiscal Q1 2022.

The company’s bottom line was hurt by high inflation in input costs, labor and transportation. The company expects this inflationary pressure to continue through the rest of fiscal 2022. So much for transitory inflation. If inflation had indeed been transitory as the Fed would have us believe, Social Security would not have approved a 5.9% increase to the cost of living adjustment (COLA) for 2022. This adjustment was just 1.3% for 2021.

The only reason the company was mildly interesting was because the insider buying shares was previously the CFO of McDonald’s (MCD) and retired as the Chief Administrative Officer of McDonald’s in 2016. Peter Bensen joined Lamb Weston’s Board of Directors in 2017 and this is the second time he has purchased shares of the company since he joined the board. His enthusiasm for the stock could be attributed to revenue growth at Lamb Weston during the last two quarters where revenue jumped double digits to around $1 billion. However that jump was compared to the prior year pandemic quarters when several restaurants were shut down. Revenue in the most recent quarters is at the same level as pre-pandemic quarters.

Someone who spent 20 years at McDonald’s probably knows something about a company that makes frozen french fries or maybe he sees the big drop in the company’s shares in recent weeks as a buying opportunity. Barring the pandemic related drop, the stock has not been this low since early 2018, which was incidentally the first time Mr. Bensen purchased shares on the open market. At a forward P/E of 34.43 and a forward EV/EBITDA of 16, the stock doesn’t strike me as particularly attractive. By some miracle, if high inflation indeed proves to be transitory, Lamb Weston could be worth revisiting in the future.

Welcome to edition 589 of Insider Weekends. Insider buying more than doubled last week with insiders purchasing $150.04 million of stock purchased compared to $65.59 million in the week prior. Selling on the other hand declined to $1.36 billion compared to $2.69 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 dropped to 9.07. In other words, insiders sold over 9 times as much stock as they purchased. The Sell/Buy ratio this week was favorable compared to the prior week when the ratio stood at 41.07.

Notable Insider Buys:

1. Annovis Bio, Inc. (ANVS): $27.99

Shares of this clinical stage drug platform company were acquired by 3 insiders:

  • President and CEO Maria-Luisa Maccecchini acquired 18,000 shares, paying $27.61 per share for a total amount of $496,980. Ms. Maccecchini increased her stake by 1.88% to 976,775 shares with this purchase.
  • Director Mark K. White acquired 5,000 shares, paying $27.40 per share for a total amount of $137,000. Mr. White increased his stake by 9.77% to 56,177 shares with this purchase.
  • Director Claudine Bruck acquired 181 shares, paying $27.66 per share for a total amount of $5,006. Ms. Bruck increased her stake by 3.08% to 6,067 shares with this purchase.

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

P/E: N/A Forward P/E: -10.1 Industry P/E: N/A
P/S: N/A Price/Book: 4.66 EV/EBITDA: N/A
Market Cap: $226.73M Avg. Daily Volume: 560,247 52 Week Range: $4.14 – $132

2. Lamb Weston Holdings, Inc. (LW): $56.24

Director Peter J. Bensen acquired 5,000 shares of this frozen potato products company, paying $55.75 per share for a total amount of $278,740. These shares were purchased indirectly through a trust. These shares were purchased indirectly through a trust.

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

P/E: 32.14 Forward P/E: 19.6 Industry P/E: 21.19
P/S: 2.17 Price/Book: 19.22 EV/EBITDA: 17.68
Market Cap: $8.21B Avg. Daily Volume: 1,418,167 52 Week Range: $54.18 – $86.41

3. Longeveron Inc. (LGVN): $3.98

Shares of this clinical stage biotech company were acquired by 5 insiders:

  • Director Rock Soffer acquired 19,900 shares, paying $3.66 per share for a total amount of $72,855. Mr. Soffer increased his stake by 62.47% to 51,757 shares with this purchase.
  • Chief Scientific Officer Joshua Hare acquired 7,500 shares, paying $3.49 per share for a total amount of $26,155. Mr. Hare increased his stake by 0.09% to 7,933,263 shares with this purchase.
  • CFO and Treasurer James Clavijo acquired 5,000 shares, paying $3.34 per share for a total amount of $16,700. Mr. Clavijo increased his stake by 6.70% to 79,598 shares with this purchase.
  • General Counsel, Secretary Paul T. Lehr acquired 1,750 shares, paying $3.34 per share for a total amount of $5,845. Mr. Lehr increased his stake by 1.53% to 116,366 shares with this purchase.
  • CEO Geoff Green acquired 1,000 shares, paying $3.81 per share for a total amount of $3,810. Mr. Green increased his stake by 0.72% to 139,723 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 19.45 Price/Book: 3.09 EV/EBITDA: -5.81
Market Cap: $76.08M Avg. Daily Volume: 156,513 52 Week Range: $3.2 – $12.48

4. Forian Inc. (FORA): $10.3

Director Martin J. Wygod acquired 9,002 shares of this health information services provider, paying $10.04 per share for a total amount of $90,380. These shares were purchased indirectly through a trust.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 51.29 Price/Book: 9.3 EV/EBITDA: -23.07
Market Cap: $335.35M Avg. Daily Volume: 47,833 52 Week Range: $9.28 – $45

5. Super League Gaming, Inc. (SLGG): $3.23

Shares of this video gaming and esports entertainment platform were acquired by 2 insiders:

  • Director Mark Jung acquired 16,010 shares, paying $3.12 per share for a total amount of $49,898. These shares were purchased indirectly through an IRA.
  • Chief Commercial Officer Matthew Evan Edelman acquired 10,000 shares, paying $3.20 per share for a total amount of $31,983. These shares were purchased indirectly by 3MB Associates.

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

P/E: N/A Forward P/E: -5.67 Industry P/E: 30.12
P/S: 34.3 Price/Book: 1.16 EV/EBITDA: -4.43
Market Cap: $115.56M Avg. Daily Volume: 359,096 52 Week Range: $1.63 – $11.2

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

Notable Insider Sales:

1. Alphabet Inc. (GOOG): $2833.5

Director Sergey Brin sold 83,332 shares of Alphabet for $2764.65, generating $230.38 million from the sale.

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

P/E: 30.74 Forward P/E: 26.76 Industry P/E: 30.12
P/S: 8.57 Price/Book: 7.96 EV/EBITDA: 23.53
Market Cap: $1.89T Avg. Daily Volume: 1,072,409 52 Week Range: $1514.62 – $2936.41

2. Facebook, Inc. (FB): $324.76

Shares of Facebook were sold by 2 insiders:

  • COB and CEO Mark Zuckerberg sold 316,104 shares for $328.71, generating $103.91 million from the sale. These shares were sold indirectly by various entities.
  • Chief Legal Officer Jennifer Newstead sold 125 shares for $322.84, generating $40,355 from the sale.

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

P/E: 24.12 Forward P/E: 20.23 Industry P/E: 30.12
P/S: 8.74 Price/Book: 6.64 EV/EBITDA: 16.8
Market Cap: $915.64B Avg. Daily Volume: 15,793,093 52 Week Range: $244.61 – $384.33

3. C3.ai, Inc. (AI): $45.3

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

  • Chief Executive Officer Thomas M. Siebel sold 484,149 shares for $46.17, generating $22,352,186 from the sale. These shares were sold indirectly through a trust.
  • Senior VP and CFO David Barter sold 170,333 shares for $45.04, generating $7,671,798 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Product Officer Houman Behzadi sold 30,000 shares for $44.63, generating $1,339,023 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: -48.71 Industry P/E: 64.20
P/S: 24.17 Price/Book: 4.51 EV/EBITDA: -42.22
Market Cap: $4.72B Avg. Daily Volume: 2,579,723 52 Week Range: $42.7 – $183.9

4. Moderna, Inc. (MRNA): $324.21

Shares of Moderna were sold by 4 insiders:

  • Chief Technical Operations and Quality Officer Juan Andres sold 25,000 shares for $305.07, generating $7.63 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President Stephen Hoge sold 20,000 shares for $314.48, generating $6.29 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Executive Officer Stephane Bancel sold 19,000 shares for $322.32, generating $6.12 million from the sale. 10,000 of these shares were sold indirectly by OCHA LLC.
  • Director Paul Sagan sold 2,250 shares for $314.90, generating $708,525 from the sale. These shares were sold indirectly by Erwin Park LLC.

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

P/E: 38.3 Forward P/E: 11.88 Industry P/E: N/A
P/S: 18.64 Price/Book: 19.49 EV/EBITDA: 32.31
Market Cap: $130.87B Avg. Daily Volume: 19,806,341 52 Week Range: $65.49 – $497.49

5. Arista Networks, Inc. (ANET): $389.78

Shares of this networking company were sold by 3 insiders:

  • President and CEO Jayshree Ullal sold 29,500 shares for $383.54, generating $11.31 million from the sale.
  • CTO and SVP Software Eng. Kenneth Duda sold 14,534 shares for $376.32, generating $5.47 million from the sale. 10,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • SVP, Chief Operating Officer Anshul Sadana sold 4,234 shares for $360.39, 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 Arista Networks, Inc. here.

P/E: 42.54 Forward P/E: 32.73 Industry P/E: 32.71
P/S: 11.38 Price/Book: 8.08 EV/EBITDA: 31.67
Market Cap: $29.9B Avg. Daily Volume: 408,256 52 Week Range: $200.35 – $396.51

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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