With earnings season upon us, we are starting to see an uptick in insider transactions and I expect the pace of activity to accelerate in the next five weeks. Paying attention to what insiders do late in a quarter before earnings related quiet periods kick in can be profitable. We saw this with contract research organization Medpace Holdings (MEDP), which was our spotlight idea in the August 2022 Special Situations Newsletter. The company reported excellent Q3 2022 results and the stock is up more than 40% during the last week.
Looking at the latest crop of insider transactions, it was interesting to see a lot of insider buying among regional banks. The interest rate environment is favorable for regional banks and likely to offset the drop in origination fee revenue from loans banks don’t retain on their balance sheets. Three out of the top five insider purchases this week were in regional banks.
It was also interesting to see that insiders of the social media company Snap (SNAP), including the CEO and CTO, continued selling despite the huge drop in the stock in recent days following disappointing results. Their sales were based on established 10b5-1 plans but I would have expected them to discontinue or pause those plans, considering the 80% decline in the stock over the last year.
Snap, Meta Platforms (META) and Alphabet (GOOG) all reported weak results and were impacted by declines in advertising revenue. It was surprising to see that Alphabet’s YouTube also posted a year-over-year decline in revenue. Snap saw its stock price drop by 28%, Meta saw its stock decline by 26% and Alphabet posted a drop of nearly 7% the day following the release of quarterly results. The only social media company to buck this trend was Pinterest (PINS), which was up more than 11% after reporting an 8% increase in revenue that beat estimates. I started a small position in Meta the day following results and will likely add to that position across three or four trades during the next few months.
Welcome to edition 643 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $90.63 million of stock compared to $9.04 million in the week prior. Selling also increased to $381.11 million compared to $210.91 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 dropped to 4.21. 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 23.33.
Notable Insider Buys:
1. Rocket Companies, Inc. (RKT): $6.71
Shares of this mortgage originator were acquired by 2 insiders:
You can view the list of recent insider transactions for Rocket Companies, Inc. here.
P/E: 3.72 | Forward P/E: 13.16 | Industry P/E: 10.78 |
P/S: 1.34 | Price/Book: 1.46 | EV/EBITDA: 5.67 |
Market Cap: $13.33B | Avg. Daily Volume: 3,363,404 | 52 Week Range: $5.97 – $18.13 |
2. Texas Capital Bancshares, Inc. (TCBI): $60.19
Shares of this bank holding company were acquired by 2 insiders:
You can view the list of recent insider transactions for Texas Capital Bancshares, Inc. here.
P/E: 19.48 | Forward P/E: 14.23 | Industry P/E: 10.78 |
P/S: 3.32 | Price/Book: 1.16 | EV/EBITDA: N/A |
Market Cap: $3B | Avg. Daily Volume: 448,437 | 52 Week Range: $48.79 – $71.6 |
3. First Financial Bankshares, Inc. (FFIN): $38.07
Shares of this regional bank were acquired by 5 insiders:
You can view the list of recent insider transactions for First Financial Bankshares, Inc. here.
P/E: 23.5 | Forward P/E: 22.13 | Industry P/E: 10.78 |
P/S: 10.55 | Price/Book: 4.79 | EV/EBITDA: N/A |
Market Cap: $5.43B | Avg. Daily Volume: 388,603 | 52 Week Range: $36.5 – $55 |
4. First Internet Bancorp (INBK): $25.79
Shares of this bank holding company were acquired by 3 insiders:
You can view the list of recent insider transactions for First Internet Bancorp here.
P/E: 6.05 | Forward P/E: 11.51 | Industry P/E: 10.78 |
P/S: 1.98 | Price/Book: 0.66 | EV/EBITDA: N/A |
Market Cap: $239.61M | Avg. Daily Volume: 31,965 | 52 Week Range: $22.01 – $53.56 |
5. Tenet Healthcare Corporation (THC): $44.83
EVP & Chief Financial Officer Daniel J. Cancelmi acquired 11,000 shares of this hospital operator, paying $43.07 per share for a total amount of $473,770. Mr. Cancelmi increased his stake by 2.88% to 392,815 shares with this purchase.
You can view the list of recent insider transactions for Tenet Healthcare Corporation here.
P/E: 8.77 | Forward P/E: 7.6 | Industry P/E: 24.77 |
P/S: 0.25 | Price/Book: 3.92 | EV/EBITDA: 6.19 |
Market Cap: $4.84B | Avg. Daily Volume: 1,582,737 | 52 Week Range: $36.69 – $92.65 |
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Jefferies Financial Group Inc. (JEF): $34.33
President Brian P. Friedman sold 640,000 shares of this investment bank for $32.85, generating $21.02 million from the sale. 140,000 of these shares were sold indirectly by a Family Limited Partnership.
You can view the list of recent insider transactions for Jefferies Financial Group Inc. here.
P/E: 9.33 | Forward P/E: 9.33 | Industry P/E: 10.78 |
P/S: 1.23 | Price/Book: 0.76 | EV/EBITDA: N/A |
Market Cap: $7.86B | Avg. Daily Volume: 1,265,998 | 52 Week Range: $25.88 – $44.47 |
2. Akero Therapeutics, Inc. (AKRO): $40.81
Shares of this clinical stage drug development company were sold by 3 insiders:
You can view the list of recent insider transactions for Akero Therapeutics, Inc. here.
P/E: N/A | Forward P/E: -11.34 | Industry P/E: 24.77 |
P/S: N/A | Price/Book: 10.33 | EV/EBITDA: -12.35 |
Market Cap: $1.89B | Avg. Daily Volume: 1,459,731 | 52 Week Range: $7.52 – $45.32 |
3. Snap Inc. (SNAP): $10.08
Shares of this social media company were sold by 2 insiders:
You can view the list of recent insider transactions for Snap Inc. here.
P/E: N/A | Forward P/E: 28 | Industry P/E: 15.48 |
P/S: 3.53 | Price/Book: 5.58 | EV/EBITDA: -20.28 |
Market Cap: $16.26B | Avg. Daily Volume: 53,503,878 | 52 Week Range: $7.33 – $57.14 |
4. Atlassian Corporation (TEAM): $200.82
Co-CEO, Co-Founder Michael Cannon-Brookes sold 43,070 shares of this software application company for $197.77, generating $8.52 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Atlassian Corporation here.
P/E: N/A | Forward P/E: 85.82 | Industry P/E: 21.19 |
P/S: 18.27 | Price/Book: 152.6 | EV/EBITDA: -656.55 |
Market Cap: $51.2B | Avg. Daily Volume: 1,739,937 | 52 Week Range: $159.54 – $461.45 |
5. Equifax Inc. (EFX): $170.89
Shares of this credit services company were sold by 5 insiders:
You can view the list of recent insider transactions for Equifax Inc. here.
P/E: 29.72 | Forward P/E: 21.85 | Industry P/E: 18.54 |
P/S: 4.04 | Price/Book: 5.56 | EV/EBITDA: 15.4 |
Market Cap: $20.92B | Avg. Daily Volume: 801,840 | 52 Week Range: $145.98 – $300.11 |
You can view the full list of sales from this Insider Sales page.
Disclaimer: I own long positions in Rocket Companies (RKT), Atlassian Corporation (TEAM) and Meta Platforms (META). 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.