Happy New Year and welcome to edition 653 of Insider Weekends.
To start the new year, I decided to take a slightly different approach to Insider Weekends this week. Since many of the companies that made the list of top 5 insider purchases were companies we have written about multiple times in the past, I decided to pick a different company that I added to my watchlist while reviewing insider purchases earlier last week.
HireQuest (HQI) is a tiny microcap stock with a market cap of $219 million and an enterprise value of $224 million on account of $5 million in net debt on the balance sheet. The company has an interesting business model where it is a staffing franchisor that allows is franchisees to offer temporary staffing and professional recruiting solutions.
The company has 220 branches across 168 franchisees. As you would expect from a franchisor business, margins are great with gross margin that exceeds 90% and net margin of over 35%. The company has been growing rapidly from a very small base (TTM revenue is just $33.6 million). Oddly enough, this tiny company also chooses to pay a 6 cents per share quarterly dividend. The dividend yield is a paltry 1.52% with a 23% payout ratio.
The company has been growing through acquisitions and despite a drop in revenue in 2020 on account of the pandemic, managed to stay profitable. It was also good to see that over the last several years, free cash flow has consistently been above stated net income.
The insider purchasing shares, Rimmy Malhotra, has been on the company’s Board of Directors since July 2019 and is currently the Vice Chair of the Board. He purchased 4,895 shares at an average price of $16.17 for a total of $79,134. Another Director, Kathleen Shanahan also purchased 1,412 shares at an average price of $17.70 in early December. You can see a full list of 2022 insider transactions for the company below.
The stock trades at a reasonable forward P/E of 17 and a forward EV/EBITDA of 9.10. I don’t like to rush into companies that I just came across and like to let them marinate on a watchlist. I am going to continue monitoring the company for now to see if it could eventually become a candidate for a deeper research piece and a potential candidate for the model portfolio..
Overall insider buying decreased last week with insiders purchasing $28.15 million of stock compared to $65.81 million in the week prior. Selling also decreased to $417.84 million compared to $719.56 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 14.84 . In other words, insiders sold almost 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 10.93.
Notable Insider Buys:
1. B. Riley Financial, Inc. (RILY): $34.2
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: 5.85||Forward P/E: N/A||Industry P/E: 10.85|
|P/S: 1.17||Price/Book: 1.88||EV/EBITDA: N/A|
|Market Cap: $972.89M||Avg. Daily Volume: 353,125||52 Week Range: $30.75 – $91.24|
2. Great Elm Group, Inc. (GEG): $2.02
Director Jason W. Reese acquired 395,995 shares of this holding company, paying $2.00 per share for a total amount of $791,190. These shares were purchased indirectly by Imperial Capital Asset Management, LLC.
You can view the list of recent insider transactions for Great Elm Group, Inc. here.
|P/E: N/A||Forward P/E: 5.05||Industry P/E: 24.90|
|P/S: 0.87||Price/Book: 2.13||EV/EBITDA: 32.22|
|Market Cap: $60.65M||Avg. Daily Volume: 17,827||52 Week Range: $1.4 – $2.55|
3. Coinbase Global, Inc. (COIN): $35.39
Director Tobias Lutke acquired 11,332 shares of this cryptocurrency exchange, paying $32.58 per share for a total amount of $369,197. These shares were purchased indirectly by 7910240 Canada Inc.
You can view the list of recent insider transactions for Coinbase Global, Inc. here.
|P/E: 3.62||Forward P/E: 884.75||Industry P/E: 10.79|
|P/S: 1.84||Price/Book: 1.43||EV/EBITDA: 65.19|
|Market Cap: $9.27B||Avg. Daily Volume: 14,270,391||52 Week Range: $31.83 – $261.63|
4. GlycoMimetics, Inc. (GLYC): $3.03
Chief Medical Officer Edwin Rock acquired 110,000 shares of this biotech company, paying $2.25 per share for a total amount of $247,500. Mr. Rock increased his stake by 55.00% to 310,000 shares with this purchase.
You can view the list of recent insider transactions for GlycoMimetics, Inc. here.
|P/E: N/A||Forward P/E: -4.66||Industry P/E: 24.75|
|P/S: 1714.92||Price/Book: 3.3||EV/EBITDA: -1.99|
|Market Cap: $158.84M||Avg. Daily Volume: 501,387||52 Week Range: $0.51 – $3.192|
5. Enterprise Products Partners L.P. (EPD): $24.12
Shares of this midstream energy services provider were acquired by 2 insiders:
You can view the list of recent insider transactions for Enterprise Products Partners L.P. here.
|P/E: 10.44||Forward P/E: 9.42||Industry P/E: 8.10|
|P/S: 0.94||Price/Book: 1.99||EV/EBITDA: 9.86|
|Market Cap: $52.47B||Avg. Daily Volume: 5,577,046||52 Week Range: $22.01 – $28.65|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Walmart Inc. (WMT): $141.79
Director Robson S. Walton sold 350,000 shares of Walmart for $143.31, generating $50.16 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Walmart Inc. here.
|P/E: 43.63||Forward P/E: 21.68||Industry P/E: 20.25|
|P/S: 0.64||Price/Book: 5.3||EV/EBITDA: 12.84|
|Market Cap: $382.38B||Avg. Daily Volume: 6,324,035||52 Week Range: $117.27 – $160.77|
2. Airbnb, Inc. (ABNB): $85.5
Shares of Airbnb were sold by 2 insiders:
You can view the list of recent insider transactions for Airbnb, Inc. here.
|P/E: 34.2||Forward P/E: 30.87||Industry P/E: 12.95|
|P/S: 6.74||Price/Book: 9.77||EV/EBITDA: 27.84|
|Market Cap: $54.14B||Avg. Daily Volume: 6,128,624||52 Week Range: $81.91 – $191.73|
3. Toast, Inc. (TOST): $18.03
COO & Co-President Aman Narang sold 702,523 shares of this cloud-based and digital technology platform for $17.12, generating $12.03 million from the sale. These shares were sold indirectly by various trusts.
You can view the list of recent insider transactions for Toast, Inc. here.
|P/E: N/A||Forward P/E: -225.38||Industry P/E: 22.30|
|P/S: 3.79||Price/Book: 8.36||EV/EBITDA: -22.13|
|Market Cap: $9.39B||Avg. Daily Volume: 5,847,003||52 Week Range: $11.91 – $35.55|
4. FirstCash Holdings, Inc (FCFS): $86.91
Director Douglas Richard Rippel sold 119,836 shares of this retail pawn stores operator for $88.24, generating $10.57 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for FirstCash Holdings, Inc here.
|P/E: 20.03||Forward P/E: 13.97||Industry P/E: 10.79|
|P/S: 1.62||Price/Book: 2.24||EV/EBITDA: 9.46|
|Market Cap: $4.03B||Avg. Daily Volume: 236,124||52 Week Range: $58.3 – $100|
5. Atlassian Corporation (TEAM): $128.68
Co-CEO, Co-Founder Michael Cannon-Brookes sold 25,842 shares of this software application company for $125.70, generating $3.25 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Atlassian Corporation here.
|P/E: N/A||Forward P/E: 65.99||Industry P/E: 22.30|
|P/S: 10.97||Price/Book: 68.41||EV/EBITDA: -195.59|
|Market Cap: $32.88B||Avg. Daily Volume: 3,362,161||52 Week Range: $113.855 – $380.63|
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold long positions in B. Riley (RILY), Atlassian (TEAM) and Airbnb (ABNB) (through the sale of out of money naked out options). 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.