Insider Weekends: Bill Ford Jr. Purchases $8.5 Million Worth Of Ford Stock

When looking the investment landscape early last year when the COVID-19 pandemic started unfolding around us and even earlier this year, little did I anticipate that some of the biggest gainers this year would be auto stocks. I was more focused on companies like Berkshire Hathaway (BRK.A) that were positioned to do well if we saw sector or style rotation as discussed in this Twitter thread. Auto manufacturers have had a great year, benefiting from a combination of,

  • increased demand from consumers flush with cash, as you can see from the following M2 money supply chart
  • higher prices for both used and new cars
  • historically low interest rates and lax lending standards
  • a shift to electrification, which has seen even Ferrari announce a plug-in hybrid version of its supercar
M2 Money Supply Nov 2021

M2 Money Supply Nov 2021 (source: FRED)

The biggest beneficiary of these trends this year has been Ford (F), which has seen its stock shoot up nearly 125% this year as you can see from the chart below. The company’s all electric Ford Mach-E has been a big hit and is benefiting from the fact that Ford electric vehicles are still eligible for the $7,500 federal tax credit. When I was considering a second electric vehicle earlier this year to replace an old gas guzzler, the Mach-E was near the top of my list and the wait time then was more than 3 months. It looks like the wait time has now increased to 20+ weeks and the Premium and GT models now have a wait time of 28+ weeks. This increase in wait time is interesting considering the company indicated during its third quarter 2021 earnings call that it has seen a significant increase in semiconductor availability. The much anticipated electric F-150 truck is expected to launch in Spring 2022.

The company saw a big increase in its operating cash flow in Q3 to $7.7 billion, reinstated its quarterly dividend at 10 cents a share and raised its full year guidance to between $10.5 billion and $11.5 billion in operating earnings. The stock trades at a forward 2022 P/E of 10 and a forward EV/EBITDA of 15. Investors that may get turned off by the large net debt on Ford’s balance sheet should consider that a majority of it is from its financing arm. The company’s financing division has $122.52 billion of debt and liabilities partially offset by $106.37 billions of loans and leases. Ford has $25.62 billion in other debt that is more than offset by $31.42 billion of cash and short-term investments. The quality of the underwriting in its financing division is a key risk given the size of their liabilities.

 

Ford GM Tesla and Ferrari YTD Stock Chart

Ford GM Tesla and Ferrari YTD Stock Chart (source: Yahoo Finance)

Chairman Bill Ford Jr.’s insider purchase was through a trust and eclipses his previous $8 million purchase from Aug 2019 as you can see here. The difference is that he is paying more than twice what he paid per share last year when he paid $9.51 per share. He had made a few opportunistic purchases over the years but this is his largest one thus far. I expect some near-term market volatility in Ford’s stock on account of market conditions but if the company can execute well on its electrification strategy, the future looks brighter than it has in the past couple of decades.

Welcome to edition 598 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $606.19 million of stock purchased compared to $192.84 million in the week prior. Selling on the other hand decreased to $4.06 billion compared to $5.63 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 6.69. In other words, insiders sold almost 7 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 29.2.

Notable Insider Buys:

1. Asana, Inc. (ASAN): $74.75

President, CEO, & Chairman Dustin A. Moskovitz acquired 1,250,000 shares of this work management platform, paying $65.02 per share for a total amount of $81.28 million. Mr. Moskovitz increased his stake by 17.63% to 8,339,676 shares with this purchase.

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

P/E: N/A Forward P/E: -75.51 Industry P/E: 59.11
P/S: 41.62 Price/Book: 56.25 EV/EBITDA: -62.04
Market Cap: $13.94B Avg. Daily Volume: 3,426,004 52 Week Range: $25.41 – $145.79

2. Katapult Holdings, Inc. (KPLT): $3.41

Director Donald Gayhardt acquired 2,648,500 shares of this e-commerce focused “buy now pay later” company, paying $3.74 per share for a total amount of $9.89 million. These shares were purchased indirectly by CURO Ventures, LLC.

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

P/E: N/A Forward P/E: -17.95 Industry P/E: 8.02
P/S: 1.1 Price/Book: 10.03 EV/EBITDA: 11.33
Market Cap: $332.38M Avg. Daily Volume: 4,877,014 52 Week Range: $2.63 – $19.653

3. Selecta Biosciences, Inc. (SELB): $3.1

Director Timothy A. Springer acquired 4,032,463 shares of this biotech company, paying $3.05 per share for a total amount of $12.32 million. These shares were purchased indirectly by TAS Partners LLC.

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

P/E: N/A Forward P/E: -5.17 Industry P/E: 498.21
P/S: 5.39 Price/Book: N/A EV/EBITDA: -16.69
Market Cap: $361.61M Avg. Daily Volume: 1,141,725 52 Week Range: $2.67 – $5.7

4. Axon Enterprise, Inc. (AXON): $144.93

Shares of the company formerly known as Taser were acquired by 2 insiders:

  • Director Hadi Partovi acquired 71,684 shares, paying $142.12 per share for a total amount of $10.19 million. Mr. Partovi increased his stake by 24.37% to 365,811 shares with this purchase.
  • Director Adriane M. Brown acquired 500 shares, paying $142.11 per share for a total amount of $71,055. Ms. Brown increased her stake by 15.54% to 3,717 shares with this purchase.

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

P/E: N/A Forward P/E: 76.68 Industry P/E: 44.58
P/S: 11.38 Price/Book: 8.79 EV/EBITDA: -93.39
Market Cap: $9.92B Avg. Daily Volume: 468,123 52 Week Range: $115.57 – $212.37

5. Artisan Partners Asset Management Inc. (APAM): $45.75

Director Tench Coxe acquired 220,000 shares of this publicly owned investment manager, paying $45.39 per share for a total amount of $9.99 million. Mr. Coxe increased his stake by 255.37% to 306,148 shares with this purchase.

You can view the list of recent insider transactions for Artisan Partners Asset Management Inc. here.

P/E: 9.13 Forward P/E: 8.82 Industry P/E: 14.99
P/S: 3.08 Price/Book: 11.95 EV/EBITDA: 5.91
Market Cap: $3.62B Avg. Daily Volume: 517,871 52 Week Range: $43.06 – $57.65

6. Ford Motor Company (F): $19.77

Executive Chairman William Clay Ford acquired 412,500 shares of Ford Motor Company, paying $20.62 per share for a total amount of $8.51 million. These shares were purchased indirectly by a trust.

You can view the list of recent insider transactions for Ford Motor Company here.

P/E: 27.73 Forward P/E: 9.93 Industry P/E: 23.90
P/S: 0.59 Price/Book: 2.16 EV/EBITDA: 21.58
Market Cap: $79.01B Avg. Daily Volume: 93,534,801 52 Week Range: $8.43 – $21.49

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

Notable Insider Sales:

1. Tesla, Inc. (TSLA): $932.57

CEO Elon Musk sold 1,868,182 shares of Tesla for $958.48, generating $1.79 billion from the sale.

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

P/E: 304.56 Forward P/E: 113.73 Industry P/E: N/A
P/S: 19.99 Price/Book: 34.61 EV/EBITDA: 128.26
Market Cap: $936.54B Avg. Daily Volume: 26,136,285 52 Week Range: $539.49 – $1243.49

2. Walmart Inc. (WMT): $138.75

Director Robson S. Walton sold 932,094 shares of Walmart for $143.38, generating $133.64 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: 48.86 Forward P/E: 20.68 Industry P/E: 38.27
P/S: 0.67 Price/Book: 4.68 EV/EBITDA: 10.81
Market Cap: $384.88B Avg. Daily Volume: 8,690,350 52 Week Range: $126.28 – $152.57

3. Workday, Inc. (WDAY): $273.88

Shares of this enterprise cloud applications provider were sold by 3 insiders:

  • Director David A. Duffield sold 108,900 shares for $274.11, generating $29.85 million from the sale. These shares were sold indirectly by the Dave and Cheryl Duffield Foundation.
  • Co-CEO Gomez Luciano Fernandez sold 2,030 shares for $271.75, generating $551,653 from the sale.
  • Co-President Douglas A. Robinson sold 109 shares for $271.75, generating $29,621 from the sale.

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

P/E: 2340.85 Forward P/E: 76.93 Industry P/E: 59.11
P/S: 13.99 Price/Book: 16.24 EV/EBITDA: 171.27
Market Cap: $68.47B Avg. Daily Volume: 1,620,871 52 Week Range: $217.6 – $307.81

4. Arvinas, Inc. (ARVN): $73.4

Director Liam Ratcliffe sold 355,705 shares of this biotech company for $67.00, generating $23.83 million from the sale. These shares were sold indirectly by by AI Biotechnology LLC.

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

P/E: N/A Forward P/E: -23.91 Industry P/E: 39.45
P/S: 171.82 Price/Book: 4.74 EV/EBITDA: -11.69
Market Cap: $3.88B Avg. Daily Volume: 396,785 52 Week Range: $56.59 – $108.47

5. Bank7 Corp. (BSVN): $22.13

Chairman William B. Haines sold 1,000,000 shares of this regional bank for $22.00, generating $22 million from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for Bank7 Corp. here.

P/E: 9.07 Forward P/E: 7.79 Industry P/E: 9.94
P/S: 4.16 Price/Book: 1.64 EV/EBITDA: N/A
Market Cap: $200.75M Avg. Daily Volume: 15,621 52 Week Range: $13.25 – $27.28

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: I hold long positions in Workday (WDAY) and Berkshire Hathaway (BRK.B). 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.

Leave A Comment

You must be logged in to post a comment.