Reviewing the list of companies that were at a new 52 week high and the ones that had hit a fresh 52 week low last week, I was struck by just how many of the companies in the 52 week high list were financial/banking companies and from the energy sector. Similarly, a large number of companies in the 52 week low list were either biotech companies or from the technology sector. Pretty much every company in the top 5 purchases list this week are from the technology or healthcare sector and some of them have seen their stocks drop anywhere from 61% to 77% during the last year. The sector rotation we discussed in our 2022 outlook article on Seeking Alpha appears to be in full swing and accelerated in the first week of 2022.
I am not a big fan of buying companies that are seeing a significant decline in their stock price and prefer not to average down on positions, unless the decision to average into the position was made a priori. Insiders know a lot about their own companies and what lies ahead but are sometimes myopic in their view and tend to miss the big picture. This could very well be the case with some of the insiders in the list of top purchases below but there were a couple that really stood out.
Dave Blundin graduated with a degree in Computer Science from MIT in 1988 and had worked on neural networks in the AI lab in MIT. This was at a time when machine learning and AI were backwaters of computer science since we didn’t quite have the computing power or large swaths of data to unlock the power of machine learning. The situation had not changed much by the late 1990’s when I took my first AI course in grad school. Mr. Blundin used his knowledge of technology to become a serial entrepreneur co-founding 23 companies including 5 that achieved $100+ million valuations. EverQuote (EVER) is one of these companies and it functions as an online insurance broker connecting consumers that are seeking auto, homeowners, renters, life or health insurance with insurance companies. The company’s revenue is concentrated in the auto insurance segment with that vertical representing more than 80% of the company’s fiscal 2020 revenue. The company lists 19 out of the top 20 auto insurance companies in its marketplace and Progressive Insurance (PGR) represents nearly 22% of its revenue.
The company’s key competitors are SelectQuote (SLQT) and GoHealth (GOCO). SelectQuote like EverQuote, focuses on multiple verticals while GoHealth limits itself to health insurance with a specific focus on Medicare Advantage plans. All three companies have seen insider buying in recent months and all three have been hit hard as investors shifted their attention from top line growth to bottom line profitability. I am unfortunately a shareholder of GoHealth and it is the worst performing stock in our model portfolio. Thankfully other positions in the portfolio that have more than doubled or tripled helped offset the impact of GoHealth’s performance.
I put together a table comparing all three companies using Seeking Alpha’s nifty peer comparison tool. As you can see below, EverQuote is not growing as rapidly as SelectQuote or GoHealth but it also does not have any net debt unlike its competitors and is the cheapest of the lot on an EV/Sales metric. Whether EverQuote attempts to appease the street by throttling some of its growth in favor of profitability remains to be seen. Its forward growth guidance of 21% was disappointing to investors and one of the reasons for the recent weakness in the stock. I am intrigued by the company and will add it my watchlist.
Welcome to edition 601 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $260.56 million of stock purchased compared to $13.35 million in the week prior. Selling decreased to $1.14 billion compared to $1.71 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 4.39. In other words, insiders sold more than 4 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 127.86.
Notable Insider Buys:
1. Asana, Inc. (ASAN): $61.22
President, CEO, & Chair Dustin A. Moskovitz acquired 1,750,000 shares of this work management platform, paying $69.47 per share for a total amount of $121.57 million. Mr. Moskovitz increased his stake by 18.25% to 11,339,676 shares with this purchase.
You can view the list of recent insider transactions for Asana, Inc. here.
|P/E: N/A||Forward P/E: -61.84||Industry P/E: 55.77|
|P/S: 34.08||Price/Book: 46.06||EV/EBITDA: -50.74|
|Market Cap: $11.41B||Avg. Daily Volume: 3,491,404||52 Week Range: $25.41 – $145.79|
2. BridgeBio Pharma, Inc. (BBIO): $14.65
Shares of this biotech company were acquired by 6 insiders:
- Director James C. Momtazee acquired 80,000 shares, paying $14.50 per share for a total amount of $1.16 million. Mr. Momtazee increased his stake by 942.17% to 88,491 shares with this purchase.
- Director Fred Hassan acquired 19,300 shares, paying $14.17 per share for a total amount of $273,390.
- Director Brent L. Saunders acquired 17,600 shares, paying $14.48 per share for a total amount of $254,880.
- Director Douglas A. Dachille acquired 10,000 shares, paying $16.36 per share for a total amount of $163,650. These shares were purchased indirectly by a trust.
- Director Andrew Lo acquired 7,500 shares, paying $13.18 per share for a total amount of $98,850. Mr. Lo increased his stake by 18.47% to 48,099 shares with this purchase.
- Director Hannah Valantine acquired 1,764 shares, paying $14.23 per share for a total amount of $25,102.
You can view the list of recent insider transactions for BridgeBio Pharma, Inc. here.
|P/E: N/A||Forward P/E: -3.85||Industry P/E: 437.08|
|P/S: 37.86||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $2.16B||Avg. Daily Volume: 3,173,830||52 Week Range: $11.2 – $73.5|
3. EverQuote, Inc. (EVER): $15.04
Director David B. Blundin acquired 96,929 shares of this online marketplace for insurance shopping, paying $14.93 per share for a total amount of $1.45 million. Mr. Blundin increased his stake by 14.57% to 761,999 shares with this purchase.
You can view the list of recent insider transactions for EverQuote, Inc. here.
|P/E: N/A||Forward P/E: -22.79||Industry P/E: 26.32|
|P/S: 1.08||Price/Book: 5.17||EV/EBITDA: -34.73|
|Market Cap: $444.94M||Avg. Daily Volume: 421,120||52 Week Range: $11.725 – $54.96|
4. Biodesix, Inc. (BDSX): $5.4
Director John Patience acquired 160,919 shares of this data-driven diagnostic solutions company, paying $4.35 per share for a total amount of $699,998. These shares were purchased indirectly by various entities.
You can view the list of recent insider transactions for Biodesix, Inc. here.
|P/E: N/A||Forward P/E: -3.4||Industry P/E: 23.04|
|P/S: 2.24||Price/Book: 9.11||EV/EBITDA: -4.68|
|Market Cap: $166.24M||Avg. Daily Volume: 150,493||52 Week Range: $4.02 – $31.99|
5. Petros Pharmaceuticals, Inc. (PTPI): $2.72
Director John D. Shulman acquired 145,773 shares of this pharmaceutical company focused on men’s health therapeutics, paying $3.43 per share for a total amount of $500,001. These shares were purchased indirectly by JCP III SM AIV, L.P. and METP Holdings.
You can view the list of recent insider transactions for Petros Pharmaceuticals, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: 4.84||Price/Book: 1.5||EV/EBITDA: -3.98|
|Market Cap: $56.13M||Avg. Daily Volume: 18,276,758||52 Week Range: $1.19 – $5.2|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Unity Software Inc. (U): $120.38
Shares of this real-time 3D development platform were sold by 4 insiders:
- President and CEO John S. Riccitiello sold 229,192 shares for $138.53, generating $31.75 million from the sale. 12,248 of these shares were sold as a result of exercising options immediately prior to the sale.
- SVP & GM, Consumer Clive Downie sold 33,333 shares for $126.82, generating $4.23 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- SVP & GM, Operate Solutions Ingrid Lestiyo sold 4,000 shares for $130.00, generating $520,000 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- SVP & GM, Create Solutions Marc Whitten sold 1,558 shares for $144.50, generating $225,127 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 Unity Software Inc. here.
|P/E: N/A||Forward P/E: -926||Industry P/E: 55.77|
|P/S: 34.66||Price/Book: 17.48||EV/EBITDA: -78.59|
|Market Cap: $35.18B||Avg. Daily Volume: 4,378,612||52 Week Range: $76 – $210|
2. Toast, Inc. (TOST): $28.4
COO & Co-President Aman Narang sold 1,126,750 shares of this cloud-based technology platform for the restaurant industry for $32.11, generating $36.18 million from the sale.
You can view the list of recent insider transactions for Toast, Inc. here.
|P/E: N/A||Forward P/E: -66.05||Industry P/E: N/A|
|P/S: 10.01||Price/Book: 14.19||EV/EBITDA: -91.86|
|Market Cap: $14.33B||Avg. Daily Volume: 2,692,168||52 Week Range: $25.95 – $69.93|
3. Alphabet Inc. (GOOG): $2,740.09
Shares of Alphabet were sold by 5 insiders:
- SVP, Chief Business Officer Philipp Schindler sold 3,834 shares for $2,845.76, generating $10.91 million from the sale.
- Chief Executive Officer Sundar Pichai sold 3,000 shares for $2,871.51, generating $8.61 million from the sale.
- Senior Vice President Prabhakar Raghavan sold 2,475 shares for $2,889.51, generating $7.15 million from the sale.
- VP, Chief Accounting Officer Amie Thuener O’Toole sold 48 shares for $2,883.62, generating $138,414 from the sale.
- Director Ann Mather sold 18 shares for $2,889.51, generating $52,011 from the sale.
You can view the list of recent insider transactions for Alphabet Inc. here.
|P/E: 26.4||Forward P/E: 24.4||Industry P/E: N/A|
|P/S: 7.61||Price/Book: 7.45||EV/EBITDA: 20.1|
|Market Cap: $1.82T||Avg. Daily Volume: 1,130,211||52 Week Range: $1721.55 – $3037|
4. Installed Building Products, Inc. (IBP): $120.81
President, CEO and Chairman Jeffrey W. Edwards sold 200,000 shares of this building products & equipment company for $133.98, generating $26.79 million from the sale. These shares were sold indirectly by PJAM IBP Holdings.
You can view the list of recent insider transactions for Installed Building Products, Inc. here.
|P/E: 30.51||Forward P/E: 17.66||Industry P/E: 12.03|
|P/S: 1.91||Price/Book: 9.08||EV/EBITDA: 15.12|
|Market Cap: $3.59B||Avg. Daily Volume: 184,001||52 Week Range: $99.36 – $141.43|
5. MongoDB, Inc. (MDB): $429.63
Shares of this general purpose database platform were sold by 7 insiders:
- Director Dwight A. Merriman sold 17,000 shares for $465.74, generating $7.92 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- President & CEO Dev Ittycheria sold 11,646 shares for $515.05, generating $5.99 million from the sale.
- COO and CFO Michael Lawrence Gordon sold 6,480 shares for $515.06, generating $3.34 million from the sale.
- Chief Revenue Officer Cedric Pech sold 3,532 shares for $483.60, generating $1.71 million from the sale.
- Chief Technology Officer Mark Porter sold 2,620 shares for $451.20, generating $1.18 million from the sale.
- Director Charles M. Hazard sold 2,017 shares for $491.97, generating $992,310 from the sale.
- Principal Accounting Officer Thomas Bull sold 377 shares for $515.06, generating $194,178 from the sale.
You can view the list of recent insider transactions for MongoDB, Inc. here.
|P/E: N/A||Forward P/E: -767.2||Industry P/E: 50.62|
|P/S: 36.85||Price/Book: 43.24||EV/EBITDA: -111.8|
|Market Cap: $28.68B||Avg. Daily Volume: 869,420||52 Week Range: $238.01 – $590|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold a long position in GoHealth (GOCO). 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.