When insiders accumulate a stock intensively, the stock can be expected to outperform the market during the next six months. Insiders tend to buy more often than usual before large price increases and to sell more than usual before price decreases.
In this article, I will feature one company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:
The stock is purchased by three or more insiders within one month.
The stock is sold by no insiders in the month of intensive purchasing.
At least two purchasers increase their holdings by more than 10%.
Onex Corporation (OTCPK:ONEXF) is a private equity firm specializing in acquisitions and platform acquisitions. Onex focuses on creating long-term value by building industry-leading businesses in partnership with outstanding management teams. As an active owner, Onex has built more than 75 businesses, completing approximately 410 acquisitions with a total value of approximately $50 billion. Onex' long-term project returns have generated a gross multiple of capital invested of 2.9 times from its core private equity activities since inception, resulting in a 28 percent gross compound IRR on realized, substantially realized and publicly traded investments.
Insider buying by insider (last 30 days)
- Christine Donaldson purchased 1,354 shares on August 13-14 and currently holds 16,750 shares or less than 0.1% of the company. Christine Donaldson is Vice President, Finance.
- Timothy Duncanson purchased 7,847 shares on August 13-14 and currently holds 122,717 shares or 0.1% of the company. Timothy Duncanson is a managing director.
- Konstantin Gilis purchased 1,759 shares on August 13-14 and currently holds 10,716 shares or less than 0.1% of the company. Konstantin Gilis is a managing director.
- Christopher Govan purchased 4,190 shares on August 13-14 and currently holds 96,768 shares or less than 0.1% of the company. Christopher Govan is a managing director.
- Joshua Hausman purchased 800 shares on August 13-14 and currently holds 8,800 shares or less than 0.1% of the company. Joshua Hausman is a managing director.
- Robert Le Blanc purchased 8,000 shares on August 14-15 and currently holds 409,375 shares or 0.4% of the company. Robert Le Blanc is a senior managing director.
- Donald Lewtas purchased 4,873 shares on August 13-14 and currently holds 129,621 shares or 0.1% of the company. Donald Lewtas is Chief Financial Officer of Onex.
- Seth Mersky purchased 6,000 shares on July 25-26 and currently holds 275,280 shares or 0.2% of the company. Seth Mersky is a senior managing director.
- Anthony Munk purchased 5,700 shares on July 25 and currently holds 425,590 shares or 0.4% of the company. Anthony Munk is a senior managing director.
Insider buying by calendar month
Here is a table of Onex' insider-trading activity by calendar month.
|Month||Insider buying / shares||Insider selling / shares|
There have been 360,623 shares purchased and there have been zero shares sold by the insiders since March 2013.
Onex reported the second-quarter financial results on August 12 with the following highlights:
|Net loss||$718 million|
|Book value||$45.27 per share|
Onex' reported quarterly and annual consolidated financial results may vary substantially from quarter to quarter and year to year due to acquisitions and dispositions of businesses, changes in the value of its publicly traded and privately held operating companies and the effect of varying business cycles at its operating companies. Accordingly, it is difﬁcult to predict the future consolidated financial results for Onex.
Onex' competitors include Carlyle Group (NASDAQ:CG), The Blackstone Group (NYSE:BX) and Clairvest Group (OTC:CVTGF). Carlyle Group has seen one insider buy transaction in June and The Blackstone Group has seen four insider sell transactions this year. Clairvest Group has seen insider buying in July.
Onex' management team:
- Is the largest shareholder in Onex, with a combined holding of approximately 24 million shares or 21%.
- Has a total cash investment in Onex' current operating businesses of approximately $280 million.
- Is required to reinvest 25% of all gross carried interest and Management Investment Plan distributions in Onex shares until they individually own at least one million shares and hold these shares until retirement.
There have been nine different insiders buying Onex and there have not been any insiders selling Onex during the last 30 days. Two out of these nine insiders increased their holdings by more than 10%. Onex has an insider ownership of 21%. There are two analyst buy ratings, four neutral ratings and zero sell ratings with an average target price of $55.92. Onex has a book value of $45.27 per share and the stock has a dividend yield of 0.3%. I believe the book value of $45.27 per share could be a good entry point for the stock.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.