Welcome to edition fifty two of Insider Weekends and thank you for staying with us through one full year of these posts. It has been both challenging and rewarding to spend 52 weekends working through the raw SEC data and generating these posts.
Insider buying decreased with insiders purchasing $24.5 million of their stock last week when compared to $91.44 million in the week prior. Selling on the other hand increased with insiders selling $847.71 million worth of stock compared to $815.15 million 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 went up to 34.59. In other words, insiders sold nearly 35 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 8.91. 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 June 3, 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. Cincinnati Financial Corp. (CINF): $29.44
Chairman of Executive Committee John J. Schiff acquired 26,000 shares of this property & casualty insurance company, paying $30.05 per share for a total amount of $781,300. Mr. Schiff increased his stake by 0.67% to 3,932,068 shares with this purchase.
This insurance company that offers everything from life insurance to homeowners insurance currently trades just below book value and sports a dividend yield of 5.4%. The dividend payout ratio is a little high at 70%. This is the third insider purchase at Cincinnati Financial over the last three months as you can see from this page.
|P/E: 12.97||Forward P/E: 19.37||Industry P/E: 12.18|
|P/S: 1.27||Price/Book: 0.94||EV/EBITDA: 9.03|
|Market Cap: $4.80B||Avg. Daily Volume: 1,011,760||52 Week Range: $25.25 – $34.33|
2. QR Energy, LP (QRE): $21.52
Shares of this independent oil & gas company were acquired by 2 insiders:
- President & Chief Op. Officer John H. Campbell acquired 30,000 shares, paying $21.69 per share for a total amount of $650,634. Mr. Campbell increased his stake by 50.86% to 88,985 shares with this purchase.
- Vice-President & General Counsel Gregory S. Roden acquired 2,000 shares, paying $21.65 per share for a total amount of $43,300. Mr. Roden increased his stake by 20% to 12,000 shares with this purchase.
You can view the list of recent insider transactions for QR Energy, LP here.
|P/E: N/A||Forward P/E: 15.48||Industry P/E: N/A|
|P/S: 3.04||Price/Book: 4.46||EV/EBITDA: 12.05|
|Market Cap: $768.29M||Avg. Daily Volume: 120,223||52 Week Range: $19.53 – $23.56|
3. Valhi, Inc. (VHI): $43.44
Chairman of the Board Harold C. Simmons acquired 15,288 shares of this chemicals and components products company, paying $41.61 per share for a total amount of $636,202. These shares were acquired indirectly through Kronos Worldwide Inc. Mr. Simmons is also the Chairman of Kronos Worldwide.
You can view the list of recent insider transactions for Valhi, Inc. here.
|P/E: 66.63||Forward P/E: N/A||Industry P/E: 14.62|
|P/S: 2.93||Price/Book: N/A||EV/EBITDA: 23.72|
|Market Cap: $4.92B||Avg. Daily Volume: 29,323||52 Week Range: $11.03 – $48.34|
4. Concho Resources, Inc. (CXO): $91.17
Director Mark B. Puckett acquired 6,000 shares of this oil & gas exploration company, paying $92.00 per share for a total amount of $552,000. Mr. Puckett increased his stake by 58.50% to 16,256 shares with this purchase.
This is the second insider purchase in the span of a week. Another director purchased 20,000 shares last week. All other transactions have been direct or options related sales as you can see from this page.
|P/E: 49.25||Forward P/E: 15.4||Industry P/E: 24.81|
|P/S: 8.26||Price/Book: 3.82||EV/EBITDA: 21.86|
|Market Cap: $9.35B||Avg. Daily Volume: 1,082,800||52 Week Range: $51.51 – $110.89|
5. Ebix Inc. (EBIX): $17.871
President and CEO Robin Raina acquired 30,000 shares of this business software & services provider for the insurance industry, paying $17.29 per share for a total amount of $518,700. Mr. Raina increased his stake by 0.76% to 3,955,890 shares with this purchase.
Ebix is an interesting name that took a 24% tumble on March 24, from $29.72 to $22.52, following the publication of a negative article on Seeking Alpha alleging misrepresentations and accounting irregularities. The company issued a press release the very same evening refuting the claims made in the article. However the stock continued to drop over the last couple of months and lost another 5% on Friday ahead of this insider purchase filing.
Over the last few weeks I have noticed that insider buying in some of the Chinese reverse merger companies has failed to elicit a positive response from the market and it will be interesting to see if Ebix suffers a similar fate on Monday. For a company with unusually high profit margins (north of 40% according to Yahoo Finance), the stock appears to be trading at a reasonable valuation but is not as cheap as some of the beaten down for-profit education companies or the Chinese reverse merger stocks.
You can view the list of recent insider transactions for Ebix Inc. here.
|P/E: 11.4||Forward P/E: 10.96||Industry P/E: 23.03|
|P/S: 5.24||Price/Book: 2.22||EV/EBITDA: 11.78|
|Market Cap: $705.42M||Avg. Daily Volume: 1,255,300||52 Week Range: $14.1 – $30.35|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Travelzoo Inc. (TZOO): $65.96
Director Ralph Bartel sold 600,000 shares of this internet travel and entertainment company for $76.28, generating $45.8 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for Travelzoo Inc. here.
|P/E: N/A||Forward P/E: 28.19||Industry P/E: 22.6|
|P/S: 9.56||Price/Book: 35.48||EV/EBITDA: 36.44|
|Market Cap: $1.09B||Avg. Daily Volume: 1,159,560||52 Week Range: $11.6 – $103.8|
2. CARBO Ceramics Inc. (CRR): $148.95
Director William C. Morris sold 231,000 shares of this oil & gas equipment & services company for $151.03, generating $34.9 million from the sale.
You can view the list of recent insider transactions for CARBO Ceramics Inc. here.
|P/E: 38.38||Forward P/E: 21.74||Industry P/E: 21.37|
|P/S: 6.98||Price/Book: 6.37||EV/EBITDA: 20.31|
|Market Cap: $3.45B||Avg. Daily Volume: 460,144||52 Week Range: $65.93 – $169.34|
3. Steinway Musical Instruments Inc. (LVB): $23.7
Shares of this musical instruments company were sold by 3 insiders:
- Chief Executive Officer Dana Messina sold 251,004 shares for $56.00, generating $14.06 million from the sale. These shares were class A common shares.
- Chairman of the Board Kyle R. Kirkland sold 226,948 shares for $56.00, generating $12.7 million from the sale. These shares were class A common shares.
- Sr. Executive Vice President Dennis M. Hanson sold 2,199 shares for $24.90, generating $54,755 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 Steinway Musical Instruments Inc. here.
|P/E: 43.17||Forward P/E: 13.54||Industry P/E: 19.32|
|P/S: 0.9||Price/Book: 1.25||EV/EBITDA: 10.48|
|Market Cap: $286.75M||Avg. Daily Volume: 23,092||52 Week Range: $14.31 – $28.63|
4. Iron Mountain Inc. (IRM): $32.65
Director Kent P. Dauten sold 556,261 shares of this records management company for $33.77, generating $18.8 million from the sale.
You can view the list of recent insider transactions for Iron Mountain Inc. here.
|P/E: N/A||Forward P/E: 21.91||Industry P/E: 23.03|
|P/S: 2.12||Price/Book: 3.29||EV/EBITDA: 9.98|
|Market Cap: $6.55B||Avg. Daily Volume: 3,144,470||52 Week Range: $19.93 – $35.5|
5. Riverbed Technology, Inc. (RVBD): $37
Shares of this networking & communication devices company were sold by 3 insiders:
- Chairman and CEO Jerry M. Kennelly sold 133,332 shares for $38.02, generating $5.07 million from the sale. These shares were sold indirectly by a trust.
- Chief Technology Officer Steven Mccanne sold 100,000 shares for $37.18, generating $3.7 million from the sale. These shares were sold indirectly by a trust.
- Chief Financial Officer Randy Gottfried sold 20,000 shares for $38.27, generating $765,342 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 Riverbed Technology, Inc. here.
|P/E: 128.47||Forward P/E: 31.62||Industry P/E: 13.13|
|P/S: 9.66||Price/Book: 9.47||EV/EBITDA: 57.53|
|Market Cap: $5.68B||Avg. Daily Volume: 4,763,270||52 Week Range: $12.725 – $44.7|
You can view the full list of sales from this Insider Sales page.