In a market that is rightfully concerned about the continued rise in interest rates, it is fascinating to see the insiders of certain cyclical companies continue to buy stock. They truly hold a variant perception and are looking beyond the near-term pain we are likely to experience or suffer from the usual biases of anchoring and tunnel vision that insiders often do. We once again saw insider purchases at the middle-market investment bank B. Riley (RILY), the diversified REIT American Assets Trust (AAT) and mortgage lender Rocket Companies (RKT). B.Riley has diversified into countercyclical businesses through acquisitions where they can participate in the restructuring of businesses during recessions and CEO Jay Farner of Rocket Companies would have us believe that they have diversified away from just mortgage lending and now provide a full suite of lending products.
The company that however caught my eye this week was Westrock Coffee (WEST), a company that recently went public through a merger with a SPAC. Westrock is a vertically integrated coffee and tea company that provides white labeled beverages to restaurants and other retailers. Think of them as the Sysco (SYY) or U.S. Foods (USFD) of coffee. Unlike most deSPAC companies that drop like a rock after the merger is complete, this one has managed to stay above $10 and even went up right after the merger. A quick glance at the caliber of the management team and the fact that they are profitable (at least on an “adjusted” EBITDA basis) helps explain the strength in the stock. We rarely see insider buying immediately after a SPAC business combination.
SPAC arbitrageurs who are interested in getting hold of warrants for free, tend to redeem their shares to get their $10 per share back. The merger of Westrock Coffee with the SPAC Riverview Acquisition was no different with 73.5% of SPAC holders choosing to redeem shares. The warrants that are currently trading with the symbol WESTW are the ones that interest me the most. Warrants often expire in a year or two but in this case, these warrants expire in August 2027. I would recommend monitoring these warrants closely to pick them up on market weakness or a pullback in the stock. I’ll look into expanding on this opportunity in our next mid-month update.
Welcome to edition 635 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $37.62 million of stock compared to $161.93 million in the week prior. Selling also decreased to $582.18 million compared to $841.55 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 15.47. In other words, insiders sold more than 15 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 5.19.
Notable Insider Buys:
1. B. Riley Financial, Inc. (RILY): $50.95
Shares of B. Riley Financial were acquired by 2 insiders:
You can view the list of recent insider transactions for B. Riley Financial, Inc. here.
|P/E: 8.71||Forward P/E: N/A||Industry P/E: 10.49|
|P/S: 1.62||Price/Book: 2.95||EV/EBITDA: N/A|
|Market Cap: $1.44B||Avg. Daily Volume: 212,441||52 Week Range: $41.2 – $91.24|
2. SeaWorld Entertainment, Inc. (SEAS): $51.32
Chief Financial Officer and Treasurer Michelle F. Adams acquired 39,000 shares of this theme park and entertainment company, paying $51.03 per share for a total amount of $1.99 million. Mr. Adams increased his stake by 107.30% to 75,346 shares with this purchase.
You can view the list of recent insider transactions for SeaWorld Entertainment, Inc. here.
|P/E: 14.54||Forward P/E: 10.39||Industry P/E: 12.86|
|P/S: 2.08||Price/Book: N/A||EV/EBITDA: 8.43|
|Market Cap: $3.47B||Avg. Daily Volume: 1,125,100||52 Week Range: $40.01 – $76.57|
3. Woodward, Inc. (WWD): $92.01
Shares of this aerospace and energy components manufacturer were acquired by 3 insiders:
You can view the list of recent insider transactions for Woodward, Inc. here.
|P/E: 35.39||Forward P/E: 20.63||Industry P/E: 18.17|
|P/S: 2.39||Price/Book: 2.89||EV/EBITDA: 18.02|
|Market Cap: $5.54B||Avg. Daily Volume: 341,290||52 Week Range: $87.44 – $129.12|
4. American Assets Trust, Inc. (AAT): $27.41
Chairman & CEO Ernest S. Rady acquired 55,000 shares of this diversified REIT, paying $28.22 per share for a total amount of $1.55 million. These shares were purchased indirectly through a trust.
You can view the list of recent insider transactions for American Assets Trust, Inc. here.
|P/E: 42.17||Forward P/E: 38.07||Industry P/E: N/A|
|P/S: 5.23||Price/Book: 1.35||EV/EBITDA: 14.41|
|Market Cap: $2.1B||Avg. Daily Volume: 230,023||52 Week Range: $27.14 – $40.83|
5. Westrock Coffee Company, LLC (WEST): $10.92
Co-founder and Chairman Joe T. Ford acquired 107,000 shares of this coffee distributor, paying $12.15 per share for a total amount of $1.3 million.
You can view the list of recent insider transactions for Westrock Coffee Company, LLC here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: 1.09||Price/Book: N/A||EV/EBITDA: 97.31|
|Market Cap: $797.53M||Avg. Daily Volume: 286,861||52 Week Range: $9.64 – $14.4|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Airbnb, Inc. (ABNB): $113.64
Director Joseph Gebbia sold 272,597 shares of Airbnb for $114.25, generating $31.14 million from the sale. 11,636 of 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 Airbnb, Inc. here.
|P/E: 56.26||Forward P/E: 45.27||Industry P/E: 12.86|
|P/S: 9.84||Price/Book: 13.86||EV/EBITDA: 48.07|
|Market Cap: $72.67B||Avg. Daily Volume: 6,786,252||52 Week Range: $86.71 – $212.584|
2. Microsoft Corporation (MSFT): $256.06
Chief Executive Officer Satya Nadella sold 56,999 shares of Microsot for $257.71, generating $14.69 million from the sale.
You can view the list of recent insider transactions for Microsoft Corporation here.
|P/E: 26.53||Forward P/E: 21.45||Industry P/E: 21.83|
|P/S: 9.63||Price/Book: 11.48||EV/EBITDA: 19.22|
|Market Cap: $1.91T||Avg. Daily Volume: 25,112,803||52 Week Range: $241.51 – $349.67|
3. Palo Alto Networks, Inc. (PANW): $539.2
Shares of this cybersecurity platform were sold by 2 insiders:
You can view the list of recent insider transactions for Palo Alto Networks, Inc. here.
|P/E: N/A||Forward P/E: 47.51||Industry P/E: 21.83|
|P/S: 9.77||Price/Book: 255.79||EV/EBITDA: 597.98|
|Market Cap: $53.72B||Avg. Daily Volume: 1,377,638||52 Week Range: $421.55 – $640.9|
4. Intuit Inc. (INTU): $420.06
Shares of this software application company were sold by 3 insiders:
You can view the list of recent insider transactions for Intuit Inc. here.
|P/E: 57.7||Forward P/E: 26.34||Industry P/E: 21.83|
|P/S: 9.31||Price/Book: 7.21||EV/EBITDA: 39.08|
|Market Cap: $118.49B||Avg. Daily Volume: 1,569,642||52 Week Range: $339.36 – $716.86|
5. Vacasa, Inc. (VCSA): $3.84
Director Eric Breon sold 2,674,651 shares of this vacation rental management platform, for $4.22, generating $11.29 million from the sale. 852,583 of 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 Vacasa, Inc. here.
|P/E: 1.96||Forward P/E: -8.73||Industry P/E: 0.20|
|P/S: 1.58||Price/Book: 2.16||EV/EBITDA: -13.89|
|Market Cap: $1.71B||Avg. Daily Volume: 2,770,825||52 Week Range: $2.38 – $11|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold long positions in B. Riley (RILY) and Rocket Companies (RKT). 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.