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Welcome to edition nineteen of Insider Weekends. Insider buying decreased last week with insiders purchasing $2.53 million of their stock when compared to $5.27 million in the week prior. Selling on the other hand increased with insiders selling $664.15 million worth of stock when compared to $525.69 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 buying in that week. The adjusted ratio for last week went up to 262.22. In other words, insiders sold almost 262 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 99.84. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

I checked the data twice to make sure I was not missing anything. In fact the ratio is this high despite removing a $329 million sale by the CEO of Cogent (COGT), which showed up as an insider sale but had to do with the tendering of all his shares in relation to the $10.50/share all cash acquisition of Cogent by 3M (MMM) as discussed in our September 6, 2010 Merger Arbitrage Mondays post.

Insider Sell Buy Ratio October 15, 2010

Insider Sell Buy Ratio October 15, 2010

Note: As mentioned in the first post in this series Introduction to Insider Weekends, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. Smithfield Foods Inc. (SFD): $16.86

President and CEO Larry Pope acquired 15,000 shares of this meat production company, paying $14.98 per share for a total amount of $224,705.

P/E: 33.25 Forward P/E: 10.1 Industry P/E: 16.09
P/S: 0.24 Price/Book: 0.98 EV/EBITDA: 9.98
Market Cap: $2.80B Avg. Daily Volume: 2,203,760 52 Week Range: $13.08 – $21.48

2. Winmark Corp. (WINA): $34.03

Chairman & CEO John Morgan acquired 6,000 shares of this business services company, paying $34.59 per share for a total amount of $207,540.

P/E: 23.02 Forward P/E: 19.34 Industry P/E: 20.73
P/S: 4.37 Price/Book: 10.11 EV/EBITDA: 12.82
Market Cap: $170.52M Avg. Daily Volume: 6,182 52 Week Range: $19.48 – $35.5

3. The TJX Companies, Inc. (TJX): $45.03

Director Michael Hines acquired 3,200 shares of this discount retailer of apparel and home fashions, paying $44.77 per share for a total amount of $143,264.

P/E: 13.66 Forward P/E: 12.1 Industry P/E: 15.09
P/S: 0.84 Price/Book: 6 EV/EBITDA: 6.34
Market Cap: $18.04B Avg. Daily Volume: 3,822,020 52 Week Range: $35.75 – $48.5

4. Charming Shoppes Inc. (CHRS): $3.59

Shares of this specialty apparel retailer were purchased by two insiders:

  • EVP – Chief Operating Officer Anthony Romano acquired 25,000 shares, paying $3.5 per share for a total amount of $87,500
  • Director Michael Goldstein acquired 10,000 shares, paying $3.51 per share for a total amount of $35,100
P/E: N/A Forward P/E: 359 Industry P/E: 16.02
P/S: 0.19 Price/Book: 0.85 EV/EBITDA: 11.38
Market Cap: $414.50M Avg. Daily Volume: 1,024,980 52 Week Range: $2.84 – $6.91

5. Diamond Foods, Inc. (DMND): $43.83

Shares of this packaged food company were purchased by three insiders:

  • Director John Gilbert acquired 1,230 shares, paying $40.78 per share for a total amount of $50,159
  • Chairman, President & CEO Michael Mendes acquired 1,000 shares, paying $42.74 per share for a total amount of $42,740
  • SVP, Corp Strategy & Communication Linda Segre acquired 500 shares, paying $40.88 per share for a total amount of $20,438

While these purchases were for modest amounts, this is the second week in a row that Diamond is making our list. Three insiders including the CEO and CFO also purchased shares last week for an aggregate amount of $257,063.

P/E: 32.13 Forward P/E: 15.06 Industry P/E: 16.31
P/S: 1.39 Price/Book: 2.48 EV/EBITDA: 18.65
Market Cap: $958.47M Avg. Daily Volume: 251,823 52 Week Range: $29.1 – $46.67

Notable Insider Sales:

1. Oracle Corp. (ORCL): $28.9

Shares of this enterprise software company were sold by four insiders:

  • CEO Larry Ellison sold 6 million shares for $28.18 per share, generating a total amount of $169.05 million
  • Chairman of the Board Jeffrey Henley sold 500,000 shares for $28.5 per share, generating a total amount of $14.25 million. This sale was as a result of exercising options immediately prior to the sale.
  • SVP, Gen’l Counsel, Secretary Dorian Daley sold 25,000 shares for $28.61 per share, generating a total amount of $715,250. This sale was as a result of exercising options immediately prior to the sale.
  • Controller, SVP, CAO Corey West sold 15,000 shares for $28.67 per share, generating a total amount of $430,050. This sale was as a result of exercising options immediately prior to the sale.
P/E: 23.06 Forward P/E: 13.2 Industry P/E: 26.4
P/S: 4.87 Price/Book: 4.43 EV/EBITDA: 11.01
Market Cap: $145.28B Avg. Daily Volume: 36,254,100 52 Week Range: $20.65 – $28.91

2. Texas Roadhouse Inc. (TXRH): $15.34

Chairman Wayne Kent Taylor sold 1.7 million shares of this restaurant chain for an average price of $15.13 per share, generating a total amount of $25.72 million.

According to Market Folly, Carlo Cannell of Cannell Capital mentioned that Texas Roadhouse was on his watchlist of potential shorts at the Value Investing Congress.

P/E: 20.62 Forward P/E: 16.49 Industry P/E: 17.02
P/S: 1.14 Price/Book: 2.38 EV/EBITDA: 8.53
Market Cap: $1.10B Avg. Daily Volume: 673,906 52 Week Range: $9.27 – $16.2

3. CSX Corp. (CSX): $59.54

Shares of this rail-based transportation services provider were sold by four insiders:

  • Executive Vice President & CFO Oscar Munoz sold 125,000 shares for $58.45 per share, generating a total amount of $7.31 million. 100,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chairman, President & CEO Michael Ward sold 83,332 shares for $59.81 per share, generating a total amount of $4.98 million. This sale was as a result of exercising options immediately prior to the sale.
  • SVP – Law & Public Affairs Ellen Fitzsimmons sold 66,666 shares for $60.02 per share, generating a total amount of $4 million. This sale was as a result of exercising options immediately prior to the sale.
  • SVP – Human Resources Lisa Mancini sold 3,400 shares for $60 per share, generating a total amount of $204,000.
P/E: 16.07 Forward P/E: 12.83 Industry P/E: 20.49
P/S: 2.33 Price/Book: 2.66 EV/EBITDA: 7.88
Market Cap: $22.60B Avg. Daily Volume: 3,550,650 52 Week Range: $41.81 – $62

4. PetSmart, Inc. (PETM): $35.85

Shares of this specialty retailer were sold by three insiders:

  • Executive Chairman of Board Philip Francis sold 190,030 shares for $35.9 per share, generating a total amount of $6.82 million. This sale was as a result of exercising options immediately prior to the sale.
  • SVP Human Resources Neil Stacey sold 185,423 shares for $36.16 per share, generating a total amount of $6.7 million. 50,000 of Mr. Stacey’s shares were sold as a result of exercising options immediately prior to the sale.
  • SVP Real Estate & Development Jaye Perricone sold 27,002 shares for $36.25 per share, generating a total amount of $978,855. This sale was as a result of exercising options immediately prior to the sale.
P/E: 20.08 Forward P/E: 15.86 Industry P/E: 20.07
P/S: 0.78 Price/Book: 3.62 EV/EBITDA: 7.19
Market Cap: $4.25B Avg. Daily Volume: 1,209,480 52 Week Range: $23.07 – $36.57

5. Liberty Global Inc. (LBTYA): $33.48

Shares of this video, voice, and broadband Internet services provider were sold by four insiders:

  • President & COO – UPC Broadband Gene Musselman sold 132,429 shares for $31.75 per share, generating a total amount of $4.2 million
  • Sr Vice President Amy Blair sold 57,420 shares for $31.75 per share, generating a total amount of $1.82 million
  • Sr Vice President & Co-CFO Bernard Dvorak sold 57,420 shares for $31.75 per share, generating a total amount of $1.82 million
  • Sr Vice President & Secretary Elizabeth Markowski sold 34,800 shares for $32.5 per share, generating $1.13 million
P/E: 286.15 Forward P/E: 58.74 Industry P/E: 17.69
P/S: 0.66 Price/Book: 2.99 EV/EBITDA: 5.19
Market Cap: $8.16B Avg. Daily Volume: 1,833,560 52 Week Range: $18.75 – $33.67
Source: Insider Buys and Sells: Smithfield Foods, Texas Roadhouse