2 Beverage Companies And A Bank With Recent Intensive Insider Selling

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 |  Includes: BKU, MNST, SAM
by: Markus Aarnio

There was intensive insider selling in Ulta Salon, Cosmetics & Fragrance (NASDAQ:ULTA) in September 2012. The stock peaked at $103.52 on September 7, 2012 and is currently trading at $74.14 or 28.4% below the highs.

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With this episode in mind, I screened for stocks which have seen recent intensive insider selling. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

In this article, I will feature three stocks that met these three criteria of intensive insider selling in the last 30 days.

1. The Boston Beer Company (NYSE:SAM) engages in the production and sale of alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico.

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Insider selling by insider (last 30 days)

  • Martin Roper sold 9,000 shares on March 11-13 and currently holds 111,000 options or less than 0.1% of the company. Martin Roper was appointed Chief Executive Officer of the company in January 2001, and has been President of the company since December 1999.
  • Ai-Li Lim sold 116 shares on February 27 and currently holds 893 shares or less than 0.1% of the company. Ai-Li Lim is the company's Vice President of Human Resources.
  • David Burwick sold 11,000 shares on February 26-27 and currently holds 200 shares or less than 0.1% of the company. David Burwick serves as a director of the company.
  • Thomas Lance sold 21,000 shares on February 25-28 and currently holds 3,122 shares or less than 0.1% of the company. Thomas Lance is Vice President of Operations.

Insider selling by calendar month

Here is a table of The Boston Beer Company's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
March 2013 9,000 0
February 2013 32,116 0
January 2013 5,217 0
December 2012 5,100 0
November 2012 135,818 0
October 2012 4,000 0
September 2012 40,000 0
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There have been 231,251 shares sold and zero shares purchased since September 2012.

Financials

The company reported the full year 2012 financial results on February 20 with the following highlights:

Revenue $628.6 million
Net income $59.5 million
Cash $74.5 million
Debt $0.6 million
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Outlook

The company's full year 2013 earnings per diluted share projection is between $4.70 and $5.10.

Competition

The Boston Beer Company's competitors include Anheuser-Busch InBev (NYSE:BUD). Here is a table comparing these two companies.

Company SAM BUD Industry Average (Beverages - Brewers)
Market Cap: 2.03B 153.05B 1.02B
Employees: 950 117,632 3.32K
Qtrly Rev Growth (yoy): 0.08 0.04 0.06
Revenue: 580.22M 39.76B 686.36M
Gross Margin: 0.54 0.59 0.46
EBITDA: 115.94M 15.35B 50.20M
Operating Margin: 0.16 0.32 0.10
Net Income: 58.92M 7.24B N/A
EPS: 4.39 4.45 1.56
P/E: 36.43 21.47 19.84
PEG (5 yr expected): 1.65 3.18 2.53
P/S: 3.48 3.88 1.47
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The Boston Beer Company is trading above the industry average P/S ratio.

My analysis

The stock has met its $144 price target from the Point and Figure chart. There have been 10 insider sell transactions and there have not been any insider buy transactions during the last 30 days. There are two analyst buy ratings, five neutral ratings and three sell ratings, with an average target price of $110.67. The stock is trading at a P/E ratio of 36.43 and a forward P/E ratio of 28.09. The company has a book value of $19.13 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are the bearish analyst target prices and the intensive insider selling activity.

2. Monster Beverage Corporation (NASDAQ:MNST) develops, markets, sells, and distributes alternative beverage category beverages in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Rodney Sacks sold 574,067 shares on March 5-14 and currently holds 1,249,968 shares or 0.8% of the company. Rodney Sacks is Chairman and CEO of the company.
  • Hilton Schlosberg sold 574,283 shares on March 5-14 and currently holds 1,161,997 shares or 0.7% of the company. Hilton Schlosberg is Vice Chairman and President of the company.
  • Mark Vidergauz sold 12,600 shares on March 11 and currently holds 1,322 shares or less than 0.1% of the company. Mark Vidergauz serves as a director of the company.
  • Norman Epstein sold 1,322 shares on March 8 and currently holds 2,590 shares or less than 0.1% of the company. Norman Epstein serves as a director of the company.

Insider selling by calendar month

Here is a table of Monster Beverage's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
March 2013 1,162,272 0
February 2013 0 0
January 2013 0 0
December 2012 0 0
November 2012 0 0
October 2012 0 0
September 2012 0 0
August 2012 0 88
July 2012 0 0
June 2012 166,324 0
May 2012 310,000 0
April 2012 0 0
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The month of March 2013 has seen the most insider selling.

Financials

The company reported the full year 2012 financial results on February 27 with the following highlights:

Revenue $2.1 billion
Net income $340.0 million
Cash $319.6 million
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Competition

Monster Beverage's competitors include Pepsico (NYSE:PEP). Here is a table comparing these two companies.

Company MNST PEP Industry Average (Beverages - Soft Drinks)
Market Cap: 8.01B 118.86B 2.83B
Employees: 1,214 278,000 3.34K
Qtrly Rev Growth (yoy): 0.15 -0.01 0.14
Revenue: 2.06B 65.49B 279.90M
Gross Margin: 0.52 0.52 0.41
EBITDA: 567.09M 12.09B 40.10M
Operating Margin: 0.27 0.14 0.12
Net Income: 340.02M 6.17B N/A
EPS: 1.86 3.92 0.36
P/E: 26.01 19.64 29.02
PEG (5 yr expected): 1.10 2.41 2.07
P/S: 3.79 1.82 2.24
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Monster Beverage is trading above the industry average P/S ratio, which could explain some of the insider selling.

My analysis

There have been eight insider sell transactions and there have not been any insider buy transactions during the last 30 days. The stock is trading at a P/E ratio of 26.01 and a forward P/E ratio of 18.05. The company has a book value of $3.88 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are the relatively high P/S ratio and the intensive insider selling activity.

3. BankUnited (NYSE:BKU) provides a range of banking products and financial services to commercial and middle-market businesses, as well as individual customers primarily in Florida, the United States.

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Insider selling by insider (last 30 days)

  • The Blackstone Group (NYSE:BX) sold 4,810,000 shares on March 13 pursuant to a public offering. The Blackstone Group currently controls 8,305,337 shares or 8.3% of BankUnited.
  • WL Ross & Co LLC sold 4,810,000 shares on March 13 pursuant to a public offering. WL Ross & Co LLC currently controls 8,911,131 shares or 8.9% of BankUnited.
  • Centerbridge Capital Partners L P sold 3,770,000 shares on March 13 pursuant to a public offering. Centerbridge Capital Partners L P currently holds 6,997,704 shares or 7.0% of BankUnited.
  • The Carlyle Group LP (NASDAQ:CG) sold 4,810,000 shares on March 13 pursuant to a public offering. The Carlyle Group LP currently controls 8,911,131 shares or 8.9% of BankUnited.
  • Richard Lefrak sold 250,000 shares on March 13 pursuant to a public offering. Richard Lefrak currently controls 522,926 shares or 0.6% of BankUnited. Richard Lefrak serves as a director of the company.
  • John Kanas sold 800,000 shares on March 13 pursuant to a public offering. John Kanas currently controls 4,844,335 shares or 4.9% of BankUnited. John Kanas is Chairman, President and CEO of the company.
  • John Bohlsen sold 350,000 shares on March 13 pursuant to a public offering. John Bohlsen currently controls 1,969,196 shares or 2.0% of BankUnited. John Bohlsen is Chief Lending Officer.

Insider selling by calendar month

Here is a table of BankUnited's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
March 2013 19,600,000 0
February 2013 0 0
January 2013 0 0
December 2012 175,000 0
November 2012 231,400 0
October 2012 95,313 0
September 2012 1,304,207 0
August 2012 2,000 0
July 2012 0 0
June 2012 0 0
May 2012 100,113 5,000
April 2012 135,733 0
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The month of March 2013 has seen the most insider selling.

Financials

The company reported the full year 2012 financial results on January 29 with the following highlights:

Net income $207.4 million
Book value $18.45 per share
Tangible book value $17.71 per share
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Competition

BankUnited's competitors include BB&T Corporation (NYSE:BBT), BBX Capital Corporation (NYSE:BBX) and Regions Financial Corporation (NYSE:RF). Here is a table comparing these companies.

Company BKU BBT BBX RF Industry Average (Regional - Mid-Atlantic Banks)
Market Cap: 2.36B 21.68B 126.18M 11.82B 56.43M
Employees: 1,360 34,000 983 N/A 125.00
Qtrly Rev Growth (yoy): 0.35 0.07 N/A 0.30 0.10
Revenue: 690.81M 8.62B 139.07M 5.17B 29.66M
Operating Margin: 0.58 0.39 -0.16 0.32 0.29
Net Income: 192.28M 1.92B -10.63M 1.05B N/A
EPS: 2.05 2.70 14.86 0.72 0.70
P/E: 12.12 11.47 0.54 11.66 13.52
PEG (5 yr expected): 3.37 0.90 N/A 1.58 2.43
P/S: 3.48 2.58 0.91 2.27 2.03
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BankUnited is trading above the industry average P/S ratio, which could explain some of the insider selling.

My analysis

There have been eight insider sell transactions and there have not been any insider buy transactions during the last 30 days. The stock is trading at a P/E ratio of 12.12 and a forward P/E ratio of 14.96. The company has a book value of $18.45 per share and the stock has a dividend yield of 3.38%. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are the relatively high P/S ratio and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in ULTA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.