Welcome to edition forty nine of Insider Weekends. Insider buying increased with insiders purchasing $30.07 million of their stock last week when compared to $12.14 million in the week prior. Selling also increased with insiders selling $2 billion worth of stock compared to $1.69 billion in the week prior.
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 dropped to 66.8. In other words, insiders sold nearly 67 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 139.37. 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 May 13, 2011:
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. NuStar Energy L.P. (NYSE:NS): $61.89
Director William E. Greehey acquired 76,000 shares of this petroleum storage, pipeline and refining company, paying $63.62 per share for a total amount of $4.8 million. Mr. Greehey increased his stake by 6.12% to 1,316,945 shares with this purchase.
NuStar is structured as a Master Limited Partnership (MLP) and sports a yield of 6.9%. Several insiders have exercised options without turning around and selling them immediately. There have been no insider sales over the last six months. The stock took a hit earlier this week after Morgan Stanley downgraded it from “equal weight” to “underweight” along with a number of other MLPs. The recent drop in commodities like oil is also weighing down NuStar.
You can view the list of recent insider transactions for NuStar Energy L.P. here.
|P/E: 18.99||Forward P/E: 16.68||Industry P/E: 21.36|
|P/S: 0.85||Price/Book: 1.54||EV/EBITDA: 13.34|
|Market Cap: $4.00B||Avg. Daily Volume: 130,794||52 Week Range: $51.8 – $71.69|
2. Inland Real Estate Corp. (NYSE:IRC): $8.84
Director Daniel L. Goodwin acquired 157,319 shares of this shopping centers real estate investment trust (REIT), paying $9.00 per share for a total amount of $1.4 million. Mr. Goodwin increased his stake by 1.39% to 11,466,229 shares with this purchase. 50,000 of these shares were acquired indirectly by Eagle Financial, 20,000 by Inland American and 15,000 by Inland Diversified.
You can view the list of recent insider transactions for Inland Real Estate Corp. here.
|P/E: N/A||Forward P/E: 10.4||Industry P/E: 36.95|
|P/S: 4.7||Price/Book: 1.97||EV/EBITDA: 17.48|
|Market Cap: $776.89M||Avg. Daily Volume: 426,838||52 Week Range: $7.17 – $9.99|
3. Geeknet, Inc. (NASDAQ:GKNT): $26.55
Shares of this Internet media and E-commerce company were acquired by 3 insiders:
- Director Kenneth G. Langone acquired 27,424 shares, paying $24.51 per share for a total amount of $672,188. Mr. Langone increased his stake by 16.63% to 192,284 shares with this purchase.
- Director Peter A. Georgescu acquired 7,799 shares, paying $25.38 per share for a total amount of $197,956. These shares were purchased indirectly by the Peter Georgescu & Barbara Georgescu & Elwood Davis Trust.
- President & CEO, Geeknet Media Jeffrey B. Drobick acquired 6,000 shares, paying $25.38 per share for a total amount of $152,298.
Mr. Langone has been actively buying shares of Geeknet since he became Chairman of the company in mid-2010. He was one of the co-founders of The Home Depot (NYSE:HD). He has served as a director of The New York Stock Exchange and at one point attempted to buy the NYSE. He also serves on the board of directors at Yum! Brands (NYSE:YUM) and Unifi (NYSE:UFI).
We have mentioned Mr. Langone’s insider purchases of both Geeknet and Unifi several times in the past. This is however the first time other insiders have also picked up shares of Geeknet. The company was formerly known as VA Software and about a decade ago it was called VA Linux. Following Mr. Langone’s appointment the company changed its stock symbol from LNUX to GKNT and cleaned out most of its executive team to bring in fresh blood. The stock underwent a 1 for 10 reverse stock split from a pre-split price of $2.29.
Revenue was sharply higher in 2010 and profits nearly tripled in the fourth quarter of 2010, which is traditionally their strongest quarter. The company once again reported a loss of $2.4 million or 38 cents per share when it reported Q1 2011 results last week. Revenue shot up 35% year-over-year and one of their properties, ThinkGeek, recently jumped 40 spots to rank #192 on Internet Retailer’s 2011 list of America’s 500 largest e-retailers. Geeknet has $35 million in cash on the balance sheet and no debt.
VA Software aka SourceForge aka Geeknet has been a potential turnaround story for several years without actually turning around. With the new management team in place and a growing top line, the light at the end of the tunnel may finally be more than a mirage this time around
You can view the list of recent insider transactions for Geeknet, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 41.48|
|P/S: 1.75||Price/Book: 3.47||EV/EBITDA: -49.75|
|Market Cap: $166.55M||Avg. Daily Volume: 57,606||52 Week Range: $11.4 – $30.5|
4. General Motors Company (NYSE:GM): $31.07
Chief Executive Officer Daniel F. Akerson acquired 30,000 shares of this automaker, paying $31.33 per share for a total amount of $939,900. Mr. Akerson increased his stake by 150% to 50,000 shares with this purchase.
This has been the largest insider purchase of GM since it emerged out of bankruptcy and became a public company again. There were a few insider purchases in March by three directors and Mr. Akerson but as you can see from this page, those purchases were much smaller in size.
|P/E: 7.44||Forward P/E: 6.29||Industry P/E: 14.81|
|P/S: 0.34||Price/Book: 1.7||EV/EBITDA: 2.43|
|Market Cap: $46.61B||Avg. Daily Volume: 16,080,300||52 Week Range: $29.17 – $39.48|
5. Walter Investment Management Corp. (NYSEMKT:WAC): $17.8
Shares of this mortgage REIT were acquired by 2 insiders:
- Vice Chairman and Exec. V.P. Denmar John Dixon acquired 32,500 shares, paying $17.71 per share for a total amount of $575,414. Mr. Dixon increased his stake by 17.95% to 213,599 shares with this purchase.
- President & COO Charles E. Cauthen acquired 6,000 shares, paying $17.57 per share for a total amount of $105,450. Mr. Cauthen increased his stake by 1.92% to 318,659 shares with this purchase.
As is often the case with mortgage REITs, Walter Investment Management sports a double digit yield of 11.4%.
You can view the list of recent insider transactions for Walter Investment Management Corp. here.
|P/E: 12.91||Forward P/E: N/A||Industry P/E: 15.53|
|P/S: 4.98||Price/Book: 0.82||EV/EBITDA: N/A|
|Market Cap: $459.26M||Avg. Daily Volume: 420,930||52 Week Range: $14.78 – $20.22|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Sara Lee Corp. (SLE): $19.26
Director Jeffrey W. Ubben sold 7 million shares of this processed & packaged goods company for $18.99, generating $132.9 million from the sale. These shares were sold indirectly by ValueAct Capital Master Fund, L.P. Jeffrey Ubben is the Founder, Chief Executive Officer and the Chief Investment Officer of ValueAct Capital.
You can view the list of recent insider transactions for Sara Lee Corp. here.
|P/E: 9.1||Forward P/E: 18.52||Industry P/E: 17.22|
|P/S: 1.05||Price/Book: 7.28||EV/EBITDA: 9.7|
|Market Cap: $11.65B||Avg. Daily Volume: 7,269,200||52 Week Range: $13.22 – $20.26|
2. Validus Holdings, Ltd. (NYSE:VR): $31.95
Shares of this property & casualty insurance company were sold by 4 insiders:
- Director Sander M. Levy sold 3.7 million shares for $31.80, generating $117.7 million from the sale. These shares were sold indirectly by Vestar Capital Partners. Mr. Levy is a managing director of Vestar Capital Partners.
- Director Alok Singh sold 331,007 shares for $32.46, generating $10.74 million from the sale. These shares were sold indirectly by the New Mountain Funds. Alok Singh is a managing director of New Mountain Capital, L.L.C.
- Director John J. Hendrickson sold 33,785 shares for $32.96, generating $1.1 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Executive Vice President Stuart W. Mercer sold 10,000 shares for $32.32, generating $323,200 from the sale.
You can view the list of recent insider transactions for Validus Holdings, Ltd. here.
|P/E: 10.4||Forward P/E: 7.18||Industry P/E: 11.62|
|P/S: 1.67||Price/Book: 0.96||EV/EBITDA: 6.24|
|Market Cap: $3.14B||Avg. Daily Volume: 764,605||52 Week Range: $23.41 – $34.95|
3. Microsoft Corporation (NASDAQ:MSFT): $25.03
Founder and Director Bill Gates sold 5 million shares of Microsoft for $25.42, generating $127.08 million from the sale.
You can view the list of recent insider transactions for Microsoft Corporation here.
|P/E: 9.94||Forward P/E: 9.04||Industry P/E: 26.86|
|P/S: 3.11||Price/Book: 3.99||EV/EBITDA: 5.9|
|Market Cap: $211.07B||Avg. Daily Volume: 62,559,700||52 Week Range: $22.73 – $29.46|
4. Perrigo Co. (NASDAQ:PRGO): $86.6
Shares of this pharmaceutical company were sold by 5 insiders:
- Director Moshe Arkin sold 500,000 shares for $86.98, generating $43.5 million from the sale. These shares were sold indirectly by Nichsei Arkin Ltd.
- Sr. VP Commercial Business Development Jeffrey Needham sold 11,318 shares for $86.79, generating $982,272 from the sale.
- Executive VP, General Counsel Todd W. Kingma sold 6,300 shares for $87.66, generating $552,276 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Gary K. Kunkle sold 5,000 shares for $88.00, generating $440,000 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Sr. VP Global Human Resources Michael Robert Stewart sold 3,731 shares for $87.00, generating $324,597 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
You can view the list of recent insider transactions for Perrigo Co. here.
|P/E: 26.84||Forward P/E: 19.2||Industry P/E: 20.31|
|P/S: 3.04||Price/Book: 5.7||EV/EBITDA: 15.69|
|Market Cap: $8.03B||Avg. Daily Volume: 711,452||52 Week Range: $53.1 – $92.3|
5. Coach Inc. (NYSE:COH): $59.99
Chairman and CEO Lew Frankfort sold 500,000 shares of this luxury accessories and apparel company for $59.81, generating $29.9 million from the sale.
You can view the list of recent insider transactions for Coach Inc. here.
|P/E: 20.82||Forward P/E: 18.23||Industry P/E: 17.36|
|P/S: 4.43||Price/Book: 10.36||EV/EBITDA: 11.88|
|Market Cap: $17.69B||Avg. Daily Volume: 3,090,500||52 Week Range: $33.75 – $61.44|
You can view the full list of sales from this Insider Sales page.
Disclosure: I hold a long position in Geeknet in my trading portfolio.