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Welcome to edition seventy of Insider Weekends. Insider buying increased slightly with insiders purchasing $55.05 million of their stock last week when compared to $54.3 million in the week prior. Selling on the other hand decreased sharply with insiders selling $133.1 million worth of stock compared to $304.4 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 purchases that week. The adjusted ratio for last week decreased to 2.4. In other words, insiders sold more than two times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at just 5.6. 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 7, 2011:

Insider Sell Buy Ratio October 7, 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. Opko Health, Inc. (OPK): $4.44

Shares of this medical appliances & equipment company were acquired by 2 insiders:

  • CEO & Chairman Phillip Frost M.D. acquired 2,452,222 shares, paying $3.60 per share for a total amount of $8.8 million. These shares were purchased indirectly by Frost Gamma Investments Trust.
  • Vice Chairman & CTO Jane Hsiao Ph.D acquired 1,200,000 shares, paying $3.60 per share for a total amount of $4.3 million.

While Dr. Frost has been actively buying shares of Opko Health all year long as you can see from this page, this is his largest one-day purchase in over a year.

We wrote the following note about the company last October,

Dr. Frost has been nibbling on small quantities of Opko stock every few days since the start of this year. These purchases were done indirectly through Frost Gamma Investments Trust. This relatively young Miami based company that was founded in 2006 has several potential drugs in Phase II and Phase III trials. The company also develops medical devices, vaccines and ophthalmic imaging systems. Revenue at Opko has been rising over the last several quarters but the company is still unprofitable and at its current run rate could run out of cash in less than a year unless revenue ramps up significantly. The stock has been rising steadily throughout this year in lockstep with Dr. Frost’s purchases.

The 73 year old Dr. Frost has had a distinguished career, serving as the CEO of IVAX Corporation from 1987 to 2006 before it was acquired by SINLetter portfolio holding Teva Pharmaceuticals (TEVA). He is currently the Vice-Chairman of Teva Pharmaceuticals (TEVA). He also serves on the boards of Northrop Grumman (NOC), Ladenburg Thalmann Financial Services (LTS) and Castle Brands amongst many others. I will definitely add OPK to my watch list for further research.

You can view the list of recent insider transactions for Opko Health, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 21.35
P/S: 31.66 Price/Book: 11.39 EV/EBITDA: -86.3
Market Cap: $1.28B Avg. Daily Volume: 1,263,710 52 Week Range: $2.29 – $5.03

2. Equity One Inc. (EQY): $14.89

Chairman Chaim Katzman acquired 350,000 shares of this shopping center REIT, paying $15.00 per share for a total amount of $5.2 million. These shares were purchased indirectly by MGN (USA), Inc. MGN USA is a wholly owned subsidiary of Gazit-Globe. Mr. Katzman serves as the President and is one of the principal investors of Gazit-Globe.

You can view the list of recent insider transactions for Equity One Inc. here.

P/E: 19.04 Forward P/E: 13.06 Industry P/E: 29
P/S: 5.52 Price/Book: 1.15 EV/EBITDA: 17.04
Market Cap: $1.71B Avg. Daily Volume: 755,747 52 Week Range: $14.57 – $20.27

3. ARMOUR Residential REIT, Inc. (ARR): $6.84

Shares of this mortgage REIT were acquired by 2 insiders:

  • Director Daniel C. Staton acquired 150,000 shares, paying $6.29 per share for a total amount of $943,500. Mr. Staton increased his stake by 297.76% to 200,376 shares with this purchase.
  • Director Thomas K. Guba acquired 50,000 shares, paying $5.50 per share for a total amount of $275,000. Mr. Guba increased his stake by 39.88% to 175,376 shares with this purchase.

You can view the list of recent insider transactions for ARMOUR Residential REIT here.

P/E: 20.24 Forward P/E: 5.3 Industry P/E: 17.49
P/S: 42.22 Price/Book: 0.98 EV/EBITDA: N/A
Market Cap: $517.97M Avg. Daily Volume: 3,092,160 52 Week Range: $5.4 – $8.33

4. NVIDIA Corporation (NVDA): $14.15

Director Brooke Seawell acquired 100,000 shares of this graphics processor company, paying $11.91 per share for a total amount of $1.2 million. These shares were purchased indirectly through a trust.

Like several old world tech companies like Dell, HP and Cisco, Nvidia is trading at a decent valuation primarily on concerns that the best growth years are probably behind the company. Nvidia has over $4 per share in cash and trades at just 8 times EBITDA even though it sports double digit profit margins.

It is actually surprising to see the company operate independently years after AMD acquired arch rival ATI Technologies. This is the first insider purchase at Nvidia over the last year. The stock has rebounded since his purchase and continued to rally through Friday.

You can view the list of recent insider transactions for NVIDIA Corporation here.

P/E: 15.79 Forward P/E: 12.41 Industry P/E: 9.87
P/S: 2.26 Price/Book: 2.27 EV/EBITDA: 7.91
Market Cap: $8.54B Avg. Daily Volume: 22,860,200 52 Week Range: $10.51 – $26.17

5. The KEYW Holding Corporation (KEYW): $7.52

Shares of this cybersecurity services provider were acquired by 5 insiders:

  • Director John G. Hannon acquired 71,530 shares, paying $6.97 per share for a total amount of $498,471.
  • President/CEO Leonard E. Moodispaw acquired 20,000 shares, paying $7.13 per share for a total amount of $142,600. Mr. Moodispaw increased his stake by 5.22% to 403,493 shares with this purchase.
  • Director Caroline S. Pisano acquired 20,000 shares, paying $6.97 per share for a total amount of $139,500. Ms. Pisano increased her stake by 2.43% to 841,820 shares with this purchase.
  • Director William I. Campbell acquired 12,387 shares, paying $7.10 per share for a total amount of $88,000. Mr. Campbell increased his stake by 154.84% to 20,387 shares with this purchase.
  • CAO/Secretary Kimberly Dechello acquired 1,500 shares, paying $7.09 per share for a total amount of $10,635. Ms. Dechello increased her stake by 1.17% to 130,150 shares with this purchase.

You can view the list of recent insider transactions for The KEYW Holding Corporation here.

P/E: 33.72 Forward P/E: 19.79 Industry P/E: 13.11
P/S: 1.5 Price/Book: 1.19 EV/EBITDA: 30.77
Market Cap: $196.79M Avg. Daily Volume: 163,844 52 Week Range: $6.66 – $16

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. RightNow Technologies Inc. (RNOW): $36

Chairman and CEO Greg R. Gianforte sold 100,000 shares of this cloud-based software company for $33.15, generating $3.3 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for RightNow Technologies Inc. here.

P/E: 45.74 Forward P/E: 43.37 Industry P/E: 22.92
P/S: 5.51 Price/Book: 11.51 EV/EBITDA: 52.43
Market Cap: $1.20B Avg. Daily Volume: 518,541 52 Week Range: $18.74 – $36.89

2. Grand Canyon Education, Inc. (LOPE): $16.04

Executive Chairman Brent D. Richardson sold 150,000 shares of this for-profit education company for $15.57, generating $2.3 million from the sale. These shares were sold indirectly by Exeter Capital, LLC.

You can view the list of recent insider transactions for Grand Canyon Education, Inc. here.

P/E: 16.22 Forward P/E: 13.26 Industry P/E: 11.04
P/S: 1.78 Price/Book: 5.04 EV/EBITDA: 7.26
Market Cap: $710.48M Avg. Daily Volume: 363,177 52 Week Range: $12.26 – $23.26

3. Alkermes plc (ALKS): $14.56

Shares of this biotech company were sold by 2 insiders:

  • Director and CEO, Alkermes plc Richard F. Pops sold 100,000 shares for $14.33, generating $1.4 million from the sale.
  • SVP, Corp Dev., Alkermes, Inc. Michael J. Landine sold 50,000 shares for $14.43, generating $721,693 from the sale.

You can view the list of recent insider transactions for Alkermes plc here.

P/E: N/A Forward P/E: 46.97 Industry P/E: 14.65
P/S: 7.04 Price/Book: 3.68 EV/EBITDA: -41.08
Market Cap: $1.42B Avg. Daily Volume: 922,636 52 Week Range: $9.85 – $20

4. Stryker Corp. (SYK): $47.88

Director Ronda E. Stryker sold 45,000 shares of this medical devices company for $46.98, generating $2.1 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Stryker Corp. here.

P/E: 15.15 Forward P/E: 11.62 Industry P/E: 21.35
P/S: 2.37 Price/Book: 2.39 EV/EBITDA: 7.11
Market Cap: $18.59B Avg. Daily Volume: 2,770,020 52 Week Range: $43.73 – $65.21

5. Jabil Circuit Inc. (JBL): $18.6

Shares of this electronic manufacturing services provider were sold by 2 insiders:

  • Director William D. Morean sold 79,100 shares for $18.46, generating $1.5 million from the sale.
  • Chief Operating Officer Mark T. Mondello sold 10,000 shares for $18.00, generating $180,000 from the sale.

You can view the list of recent insider transactions for Jabil Circuit Inc. here.

P/E: 10.75 Forward P/E: 6.39 Industry P/E: 10.56
P/S: 0.24 Price/Book: 2.15 EV/EBITDA: 4.55
Market Cap: $3.96B Avg. Daily Volume: 4,723,410 52 Week Range: $13.67 – $23.09

You can view the full list of sales from this Insider Sales page.

Disclosure: See author's portfolio holdings here.

Source: Insider Buys and Sells: Opko Health, RightNow Technologies