Insider Weekends: SNAP Insiders Continue Selling

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.

Medpace Q3 Results and Insider Buying

Medpace Q3 Results and Insider Buying

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:

  • Chief Executive Officer Jay Farner acquired 151,700 shares, paying $6.58 per share for a total amount of $997,782. Mr. Farner increased his stake by 3.10% to 5,044,607 shares with this purchase.
  • Director Matthew Rizik acquired 16,400 shares, paying $6.58 per share for a total amount of $107,851. Mr. Rizik increased his stake by 3.71% to 458,102 shares with this purchase.

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:

  • Director Robert W. Stallings acquired 14,900 shares, paying $55.85 per share for a total amount of $832,192. Mr. Stallings increased his stake by 9.48% to 172,000 shares with this purchase.
  • Chief Risk Officer Timothy J. Storms acquired 4,400 shares, paying $57.21 per share for a total amount of $251,724. Mr. Storms increased his stake by 37.95% to 15,993 shares with this purchase.

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:

  • Director Michael B. Denny acquired 5,000 shares, paying $37.35 per share for a total amount of $186,750. These shares were purchased indirectly by a limited partnership.
  • Director April Anthony acquired 5,000 shares, paying $36.80 per share for a total amount of $184,000. Ms. Anthony increased his stake by 6.20% to 85,627 shares with this purchase.
  • Director Johnny Trotter acquired 4,000 shares, paying $36.94 per share for a total amount of $147,760. Mr. Trotter increased his stake by 0.45% to 902,057 shares with this purchase.
  • Chairman, President and CEO Scott F. Dueser acquired 1,000 shares, paying $37.59 per share for a total amount of $37,590. These shares were purchased indirectly through a trust.
  • Director Murray Hamilton Edwards acquired 1,000 shares, paying $37.73 per share for a total amount of $37,733. These shares were purchased indirectly through a trust.

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:

  • Director Justin P. Christian acquired 10,475 shares, paying $23.84 per share for a total amount of $249,724. These shares were purchased indirectly by Market Street Capital Inc.
  • Chairman and CEO David B. Becker acquired 10,000 shares, paying $23.60 per share for a total amount of $236,000. Mr. Becker increased his stake by 2.37% to 431,365 shares with this purchase.
  • President & COO Nicole S. Lorch acquired 1,000 shares, paying $22.92 per share for a total amount of $22,920. Mr. Lorch increased his stake by 2.38% to 42,955 shares with this purchase.

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:

  • Director Seth Loring Harrison sold 285,487 shares for $42.71, generating $12.19 million from the sale. 148,661 of these shares were purchased indirectly through an LLC.
  • Chief Scientific Officer Timothy Rolph sold 15,415 shares for $45.07, generating $694,782 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Operating Officer Jonathan Young sold 12,500 shares for $44.72, generating $558,944 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 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:

  • Chief Technology Officer Robert C. Murphy sold 900,000 shares for $7.56, generating $6.8 million from the sale.
  • Chief Executive Officer Evan Spiegel sold 250,000 shares for $7.54, generating $1.89 million from the sale. These shares were sold indirectly through a trust.

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:

  • EVP, CFO & COO John W. Gamble Jr. sold 15,000 shares for $165.52, generating $2.48 million from the sale.
  • CEO Mark W. Begor sold 11,000 shares for $165.51, generating $1.82 million from the sale.
  • EVP, Chief Legal Officer John J. Kelley III sold 9,000 shares for $165.56, generating $1.49 million from the sale.
  • EVP, Strategy & Mktg Officer Julia A. Houston sold 5,000 shares for $165.52, generating $827,624 from the sale.
  • EVP, President International Lisa M. Nelson sold 684 shares for $165.58, generating $113,257 from the sale.

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.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

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.

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