Insider Weekends: Ernest Rady Continues His AAT Buying Spree

The 84 year old Chairman and CEO of American Assets Trust (AAT), Ernest Rady, has been a buyer of this diversified REIT for well over a decade and last week was no exception. I normally don’t pay a lot of attention to these “perpetual” buyers but AAT grabbed my attention during the pandemic related downturn in REITs and especially in REITs that focused on the retail or office segments. AAT dropped to the low $20s twice during the depths of the pandemic but did not stay there for very long. When reviewing the REIT at that time I realized that it had a portfolio of premium properties that was better positioned to ride out a downturn.

Mr. Rady founded American Assets Trust 55 years ago in 1967 and this diversified REIT currently sports a portfolio that spans retail, office, hotels and multifamily across 5 different states. Most of this San Diego based company’s properties are concentrated in California, Hawaii, Oregon and Washington, with one location in San Antonio, Texas. I’ve had a chance to visit one of their properties (shown below) near Waikiki beach in Hawaii but at the time did not realize it was an AAT property.

American Assets Trust Waikiki

The more I dig into the company, the more I like it, especially after the recent pullback in the stock. The company increased its full year funds from operations (FFO) forecast to $2.21 to $2.27 with a midpoint of $2.24 from a prior forecast of $2.13 to $2.21 with a midpoint of $2.17, which once again was an increase from the prior quarter. You get the gist.

The company is benefiting from both rising rents and improved occupancy rates year-over-year across all its verticals. Same store sales occupancy across all verticals, with the exception of multifamily, also saw improvement on a sequential quarter basis. The stock trades at 13 times full year 2022 FFO (based on the company’s current forecast) and sports an attractive dividend yield of 4.23%.

I plan to do a deeper dive into the company either for our next mid-month update or the monthly newsletter and will look into the strength of their balance sheet, debt maturities, cap rates and new developments among other things. This company is not going to blow the lights out but could be a strong contender for a position in the real estate portion of my portfolio.

Welcome to edition 631 of Insider Weekends. Insider buying increased last week with insiders purchasing $51.51 million of stock compared to $34.47 million in the week prior. Selling more than doubled to $831.35 million compared to $398.8 million 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 16.14. In other words, insiders sold more than 16 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 11.57.

Notable Insider Buys:

1. Community Health Systems, Inc. (CYH): $3.52

Executive Chairman Wayne T. Smith acquired 1,000,000 shares of this operator of general acute care hospitals, paying $2.95 per share for a total amount of $2.95 million. Mr. Smith increased his stake by 32.69% to 4,059,196 shares with this purchase.

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

P/E: 1.54 Forward P/E: 2.63 Industry P/E: 27.96
P/S: 0.04 Price/Book: N/A EV/EBITDA: 9.31
Market Cap: $474.19M Avg. Daily Volume: 3,226,564 52 Week Range: $2.81 – $15.29

2. B. Riley Financial, Inc. (RILY): $55.73

Director Randall E. Paulson acquired 40,000 shares of B. Riley Financial, paying $52.21 per share for a total amount of $2.09 million. Mr. Paulson increased his stake by 21.52% to 225,907 shares with this purchase.

You can view the list of recent insider transactions for B. Riley Financial, Inc. here.

P/E: 9.53 Forward P/E: N/A Industry P/E: 10.64
P/S: 1.77 Price/Book: 3.23 EV/EBITDA: N/A
Market Cap: $1.58B Avg. Daily Volume: 258,474 52 Week Range: $41.2 – $91.24

3. TransUnion (TRU): $78.52

President and CEO Christopher A. Cartwright acquired 25,000 shares of this risk and information solutions provider, paying $79.42 per share for a total amount of $1.99 million. Mr. Cartwright increased his stake by 12.41% to 226,410 shares with this purchase.

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

P/E: 54.53 Forward P/E: 18.88 Industry P/E: 19.14
P/S: 4.44 Price/Book: 3.74 EV/EBITDA: 19.83
Market Cap: $15.12B Avg. Daily Volume: 1,433,616 52 Week Range: $72.26 – $125.35

4. Ranpak Holdings Corp. (PACK): $5.18

Shares of this packaging products company were acquired by 3 insiders:

  • Director Alicia M. Tranen acquired 260,000 shares, paying $5.14 per share for a total amount of $1.34 million. 210,000 of these shares were purchased indirectly by the reporting person’s children living in her household.
  • CEO and Executive Chairman Omar Asali acquired 100,000 shares, paying $5.04 per share for a total amount of $504,000. Mr. Asali increased his stake by 4.80% to 2,184,273 shares with this purchase.
  • Managing Director, APAC Antonio Grassotti acquired 4,700 shares, paying $4.85 per share for a total amount of $22,795. Mr. Grassotti increased his stake by 9.91% to 52,130 shares with this purchase.

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

P/E: N/A Forward P/E: -14 Industry P/E: 13.28
P/S: 1.12 Price/Book: 0.69 EV/EBITDA: 13.01
Market Cap: $419.87M Avg. Daily Volume: 910,993 52 Week Range: $4.72 – $42.97

5. American Assets Trust, Inc. (AAT): $29.28

Chairman & CEO Ernest S. Rady acquired 55,000 shares of this diversified REIT, paying $29.42 per share for a total amount of $1.62 million. These shares were purchased indirectly by a trust.

You can view the list of recent insider transactions for American Assets Trust, Inc. here.

P/E: 45.05 Forward P/E: 42.43 Industry P/E: 32.72
P/S: 5.62 Price/Book: 1.44 EV/EBITDA: 14.52
Market Cap: $2.26B Avg. Daily Volume: 244,162 52 Week Range: $28.38 – $40.83

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

Notable Insider Sales:

1. PTC Inc. (PTC): $120.3

Shares of this software and services company were sold by 4 insiders:

  • Director Blake D. Moret sold 290,000 shares for $121.88, generating $35.35 million from the sale. These shares were sold indirectly by Rockwell Automation.
  • President and CEO James E. Heppelmann sold 5,000 shares for $122.52, generating $612,591 from the sale.
  • EVP, GC and Secretary Staats Aaron Von sold 1,000 shares for $122.59, generating $122,594 from the sale.
  • Chief Strategy Officer Catherine Kniker sold 107 shares for $122.32, generating $13,088 from the sale.

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

P/E: 28.44 Forward P/E: 22.49 Industry P/E: 25.29
P/S: 7.44 Price/Book: 6.53 EV/EBITDA: 29.31
Market Cap: $14.17B Avg. Daily Volume: 712,045 52 Week Range: $96.55 – $137.67

2. BlackRock, Inc. (BLK): $695.93

Chairman and CEO Laurence Fink sold 44,500 shares of this asset management company for $684.61, generating $30.47 million from the sale.

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

P/E: 18.19 Forward P/E: 18.53 Industry P/E: 10.64
P/S: 5.42 Price/Book: 2.82 EV/EBITDA: 13.85
Market Cap: $105.06B Avg. Daily Volume: 903,830 52 Week Range: $575.6 – $973.16

3. The Charles Schwab Corporation (SCHW): $69.31

Co-Chairman Charles R. Schwab sold 284,900 shares of Charles Schwab for $67.29, generating $19.17 million from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for The Charles Schwab Corporation here.

P/E: 22.72 Forward P/E: 14.44 Industry P/E: 10.64
P/S: 6.76 Price/Book: 3.51 EV/EBITDA: N/A
Market Cap: $128.71B Avg. Daily Volume: 7,929,872 52 Week Range: $59.35 – $96.24

4. Mettler-Toledo International Inc. (MTD): $1347.72

Shares of this precision instruments manufacturer were sold by 5 insiders:

  • Director Olivier A. Filliol sold 8,000 shares for $1344.92, generating $10.76 million from the sale.
  • Director Robert F. Spoerry sold 2,000 shares for $1362.50, generating $2.73 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Head of Human Resources Christian Magloth sold 1,500 shares for $1351.03, generating $2.03 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Financial Officer Shawn Vadala sold 800 shares for $1344.06, generating $1.08 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Wah-Hui Chu sold 55 shares for $1352.09, generating $74,365 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 Mettler-Toledo International Inc. here.

P/E: 37.47 Forward P/E: 32.09 Industry P/E: 27.96
P/S: 7.85 Price/Book: 4172.51 EV/EBITDA: 28.46
Market Cap: $30.33B Avg. Daily Volume: 139,008 52 Week Range: $1082.78 – $1714.75

5. Murphy USA Inc. (MUSA): $286

Director Robert Madison Murphy sold 50,000 shares of this retail motor fuel products company for $285.48, generating $14.27 million from the sale. These shares were sold indirectly by a trust.

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

P/E: 13.13 Forward P/E: 21.77 Industry P/E: 13.05
P/S: 0.35 Price/Book: 8.76 EV/EBITDA: 8.55
Market Cap: $6.68B Avg. Daily Volume: 363,455 52 Week Range: $145.24 – $294.75

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 Rocket Companies (RKT), Airbnb (ABNB) and Vertex Pharmaceuticals (VRTX). 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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