Seeking Alpha
Newsletter author
Profile| Send Message|
( followers)  

Welcome to edition twenty of Insider Weekends. Insider buying increased slightly last week with insiders purchasing $3.05 million of their stock when compared to $2.53 million in the week prior. Selling on the other hand decreased with insiders selling $567.34 million worth of stock when compared to $664.15 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 down to 186.1. In other words, insiders sold almost 186 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 262.22. I removed a $5 million indirect purchase by Alfred Mann, the CEO of MannKind (MNKD), which looked like a insider purchase but was a debt for stock swap between MannKind and another company called The Mann Group. Retaining this purchase would have pushed the Sell/Buy Ratio all the way down to 70. 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.

Insider Sell Buy Ratio October 22, 2010

Insider Sell/Buy Ratio October 22, 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. Monsanto Co. (MON): $57.15

Chairman, President & CEO Hugh Grant acquired 18,000 shares of this agricultural products company, paying $56.36 per share for a total amount of $1.01 million. The previous purchase by the CEO and CFO in mid-July for $52 per share triggered a nice rally in the shares but given the current market conditions, I think the reaction to this purchase might be muted this time.

P/E: 28.39 Forward P/E: 17.32 Industry P/E: N/A
P/S: 2.98 Price/Book: 3.1 EV/EBITDA: 12.44
Market Cap: $30.90B Avg. Daily Volume: 7,493,200 52 Week Range: $44.61 – $87.06

2. Intel Corporation (INTC): $19.835

Shares of this semiconductor company were acquired by two insiders:

  • Director Frank Yeary acquired 15,000 shares, paying $19.25 per share for a total amount of $288,717. This was an interesting purchase. Mr. Yeary most recently served as the head of global M&A at Citigroup before retiring in 2008. He is currently the Vice Chancellor of the University of California, Berkeley. Intel appointed Mr. Yeary to its board of directors in March 2009. I increased my position in Intel a few weeks ago while rebalancing a couple of portfolios and like the near dominant position of the company as well as the 3.3% dividend yield.
  • Sr VP, Chief Financial Officer Stacy Smith acquired 5,000 shares, paying $19.18 per share for a total amount of $95,890
P/E: 10.67 Forward P/E: 10.28 Industry P/E: N/A
P/S: 2.58 Price/Book: 2.31 EV/EBITDA: 4.29
Market Cap: $110.58B Avg. Daily Volume: 70,463,500 52 Week Range: $17.6 – $24.37

3. General Electric Co. (GE): $16.055

Vice Chairman Michael Neal acquired 20,553 shares of GE, paying $16.23 per share for a total amount of $333,575.

P/E: 17.51 Forward P/E: 12.64 Industry P/E: N/A
P/S: 1.14 Price/Book: 1.49 EV/EBITDA: 24.78
Market Cap: $171.37B Avg. Daily Volume: 61,804,900 52 Week Range: $13.75 – $19.7

4. Alcoa, Inc. (AA): $12.72

Director James Owens acquired 10,000 shares of this aluminum manufacturing company, paying $12.73 per share for a total amount of $127,300.

Mr. Owens was the former CEO of Caterpillar (CAT) and has been a director of Alcoa since 2005.

P/E: N/A Forward P/E: 11.89 Industry P/E: N/A
P/S: 0.63 Price/Book: 0.98 EV/EBITDA: 10.2
Market Cap: $12.99B Avg. Daily Volume: 25,324,900 52 Week Range: $9.81 – $17.6

5. Oil-Dri Corp. of America (ODC): $21.92

Director Allan Selig acquired 5,000 shares of this specialty chemicals company, paying $20.46 per share for a total amount of $102,308.

P/E: 16.91 Forward P/E: 14.23 Industry P/E: 16.39
P/S: 0.69 Price/Book: 1.67 EV/EBITDA: 7.04
Market Cap: $153.51M Avg. Daily Volume: 13,935 52 Week Range: $14.75 – $23.53

Notable Insider Sales:

1. Google Inc. (GOOG): $612.53

Shares of Google were sold by three insiders:

  • Director Kavitark Ram Shriram sold 185,914 shares for $598.79 per share, generating a total amount of $111.32 million.
  • Pres, Global Sales & Bus Dev Nikesh Arora sold 3,929 shares for $599.93 per share, generating a total amount of $2.36 million.
  • Director Ann Mather sold 1,000 shares for $603.77 per share, generating a total amount of $603,771.

50,000 of the shares Mr. Shriram sold were sold indirectly by his spouse. 85,914 of his shares were sold from two trusts. 956 of the shares Mr. Arora sold were as a result of exercising options immediately prior to the sale. Ms. Mather’s sale was related to the vesting of Google Stock Units (“GSUs”).

P/E: 24.88 Forward P/E: 18.44 Industry P/E: N/A
P/S: 7.08 Price/Book: 4.5 EV/EBITDA: 14.56
Market Cap: $195.16B Avg. Daily Volume: 2,965,190 52 Week Range: $433.63 – $629.51

2. Oracle Corp. (ORCL): $28.9925

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

  • Chief Executive Officer Larry Ellison sold 3,000,000 shares for $28.93 per share, generating a total amount of $86.8 million
  • Executive Vice President Yeung Steve Au sold 272,174 shares for $28.83 per share, generating a total amount of $7.85 million
  • EVP – Product Development Thomas Kurian sold 200,000 shares for $29.06 per share, generating a total amount of $5.8 million
  • Director Molina Hector Garcia sold 6,243 shares for $28.41 per share, generating a total amount of $177,347

With the exception of Mr. Ellison’s shares, all other sales were as a result of exercising options immediately prior to the sale.

P/E: 23.14 Forward P/E: 13.24 Industry P/E: N/A
P/S: 4.95 Price/Book: 4.51 EV/EBITDA: 11.05
Market Cap: $145.75B Avg. Daily Volume: 36,454,600 52 Week Range: $20.65 – $29.24

3. EMC Corporation (EMC): $21.44

Shares of this data storage devices company were sold by four insiders:

  • Chairman, President and CEO Joseph Tucci sold 550,000 shares for $21.02 per share, generating a total amount of $11.56 million. This sale was as a result of exercising options immediately prior to the sale.
  • EVP & General Counsel Paul Dacier sold 197,050 shares for $21.17 per share, generating a total amount of $4.17 million. 180,500 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Strategy Officer, IIP, Mark Lewis sold 114,918 shares for $21.42 per share, generating a total amount of $2.46 million. 100,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP & CFO David Goulden sold 58,449 shares for $21 per share, generating a total amount of $1.23 million. 39,518 of these shares were sold as a result of exercising options immediately prior to the sale.
P/E: 30.45 Forward P/E: 14.89 Industry P/E: N/A
P/S: 2.82 Price/Book: 2.7 EV/EBITDA: 13.56
Market Cap: $44.03B Avg. Daily Volume: 26,919,800 52 Week Range: $16.12 – $21.83

4. Nxstage Medical, Inc. (NXTM): $21.68

Shares of this medical device company were sold by four insiders:

  • Director David Utterberg sold 247,324 shares for $21.21 per share, generating a total amount of $5.25 million
  • SVP and General Counsel Winifred Swan sold 3,000 shares for $21.35 per share, generating a total amount of $64,050
  • SVP Manufacturing Operations Thomas Shea sold 2,000 shares for $21.35 per share, generating a total amount of $42,700. 1,000 of the shares Mr. Shea sold were as a result of exercising options immediately prior to the sale.
  • SVP Commercial Operations Joseph E Turk Jr sold 2,000 shares for $21.21 per share, generating a total amount of $42,420
P/E: N/A Forward P/E: N/A Industry P/E: 21.6
P/S: 6.35 Price/Book: 13.14 EV/EBITDA: -114.99
Market Cap: $1.05B Avg. Daily Volume: 430,324 52 Week Range: $5.38 – $21.98

5. Illinois Tool Works Inc. (ITW): $46.69

Director Robert McCormack sold 108,400 shares of this diversified machinery company for $46.38 per share for a total amount of $5.03 million. Mr. McCormack’s shares were sold indirectly through a trust.

P/E: 15.44 Forward P/E: 12.9 Industry P/E: 20.87
P/S: 1.58 Price/Book: 2.72 EV/EBITDA: 9.47
Market Cap: $23.51B Avg. Daily Volume: 4,384,150 52 Week Range: $40.33 – $52.72

Disclosure: I have a long position in Monsanto (NYSE:MON) in my trading portfolio. I hold a long position in Intel (NASDAQ:INTC) in a long-term portfolio.

Source: Insider Buys and Sells: Monsanto, Google