Welcome to edition seventy one of Insider Weekends. Insider buying decreased sharply with insiders purchasing $3.9 million of their stock last week when compared to $55.05 million in the week prior. Selling on the other hand increased with insiders selling $423.4 million worth of stock compared to $133.1 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 went up to 107.3. In other words, insiders sold more than 107 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at just 2.4. This spike can mostly be attributed to muted insider buying as we get into earnings season. 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 14, 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. Dollar Tree, Inc. (DLTR): $80.26
Director Arnold S. Barron acquired 5,000 shares of this discount store chain, paying $79.84 per share for a total amount of $399,211. Mr. Barron increased doubled his stake to 10,000 shares with this purchase.
You can view the list of recent insider transactions for Dollar Tree, Inc. here.
|P/E: 22.26||Forward P/E: 17.45||Industry P/E: 18.9|
|P/S: 1.55||Price/Book: 6.11||EV/EBITDA: 10.86|
|Market Cap: $9.79B||Avg. Daily Volume: 1,618,740||52 Week Range: $48.51 – $81.18|
2. BSB Bancorp, Inc. (BLMT): $10.32
President and CEO Robert M. Mahoney acquired 14,425 shares of this financial services company, paying $10.34 per share for a total amount of $149,155. These shares were purchased indirectly in an IRA.
BSB Bancorp is the holding company for Belmont Savings Bank, which recently converted from a mutual holding company to a public company through an IPO last week. We have seen and discussed these types of conversions in the past and this article does a great job of explaining the reasons for these conversions.
You can view the list of recent insider transactions for BSB Bancorp, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: N/A||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $N/A||Avg. Daily Volume: 456,625||52 Week Range: $9.76 – $10.7|
3. Williams-Sonoma Inc. (WSM): $36.67
Director Adrian T. Dillon acquired 3,600 shares of this home products retailer, paying $30.88 per share for a total amount of $111,173. 2,300 of these shares were purchased indirectly by Mr. Dillon’s children and 1,300 shares were purchased indirectly through a trust.
This is the first insider purchase at Williams-Sonoma over the course of the last year as you can see from this page. While competitors like Pier 1 Imports (PIR) or Bombay struggled through or went bankrupt in the last recession, Williams-Sonoma managed to increase its earnings and is a very well run company. They are likely to face head winds in the near future as the economy slows down.
You can view the list of recent insider transactions for Williams-Sonoma Inc. here.
|P/E: 17.98||Forward P/E: 14.67||Industry P/E: 15.51|
|P/S: 1.03||Price/Book: 2.97||EV/EBITDA: 6.85|
|Market Cap: $3.80B||Avg. Daily Volume: 2,078,480||52 Week Range: $27.9 – $45.48|
4. China TransInfo Technology Corp. (CTFO): $3.35
CEO and President Shudong Xia acquired 31,500 shares of this transportation software company, paying $2.99 per share for a total amount of $94,236. Mr. Xia increased his stake by 4.98% to 664,488 shares with this purchase.
China TransInfo Technology is a Chinese Reverse Merger company that has seen its stock plummet over the last year from $6.41 to current levels. Insiders have been consistently buying as they have at other Chinese reverse merger companies but these purchases could be little more than tape painting.
You can view the list of recent insider transactions for China TransInfo Technology Corp. here.
|P/E: 5.27||Forward P/E: 5.23||Industry P/E: 24.27|
|P/S: 0.52||Price/Book: 0.7||EV/EBITDA: 3.11|
|Market Cap: $84.65M||Avg. Daily Volume: 55,377||52 Week Range: $2.07 – $6.5|
5. Diamond Foods, Inc. (DMND): $74.62
Shares of this packaged food products company were acquired by 2 insiders:
- Chief Financial and Admin Officer Steven M. Neil acquired 1,000 shares, paying $71.38 per share for a total amount of $71,375. Mr. Neil increased his stake by 1.14% to 88,788 shares with this purchase.
- SVP, Corp Strategy & Comm Linda B. Segre acquired 280 shares, paying $71.76 per share for a total amount of $20,094. Ms. Segre increased her stake by 1.65% to 17,255 shares with this purchase.
We started writing about Diamond Foods last October after a cluster of insider purchases in the $40s. The stock even back then looked a little expensive, trading at twice its pre-recession 2007 levels but continued its upward journey until it peaked at $96.13 in September. The stock has given back a lot of those gains since then.
Following its succesful acquisition of Oregon based Kettle Foods, the company is on track to acquire Pringles from Procter & Gamble (PG) this December for $2.35 billion.
You can view the list of recent insider transactions for Diamond Foods, Inc. here.
|P/E: 33.61||Forward P/E: 20.28||Industry P/E: 16.44|
|P/S: 1.6||Price/Book: 3.41||EV/EBITDA: 15.62|
|Market Cap: $1.65B||Avg. Daily Volume: 419,274||52 Week Range: $42.57 – $96.13|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Constellation Brands Inc. (STZ): $20.3
Shares of this alcoholic beverages company were sold by 3 insiders:
- Chairman of the Board Richard Sands sold 226,050 shares for $20.56, generating $4.6 million from the sale.
- President & CEO Robert Sands sold 224,522 shares for $20.56, generating $4.6 million from the sale.
- Exec. VP & Gen. Counsel Thomas J. Mullin sold 64,999 shares for $20.18, generating $1.3 million from the sale.
You can view the list of recent insider transactions for Constellation Brands Inc. here.
|P/E: 6.59||Forward P/E: 9.27||Industry P/E: 15.93|
|P/S: 1.42||Price/Book: 1.58||EV/EBITDA: 11|
|Market Cap: $4.27B||Avg. Daily Volume: 2,398,420||52 Week Range: $16.42 – $23.19|
2. QUALCOMM Incorporated (QCOM): $54.98
Shares of this wireless equipment manufacturer were sold by 2 insiders:
- Director Irwin M. Jacobs sold 116,064 shares for $51.81, generating $6.01 million from the sale. These shares were sold indirectly through a trust.
- Chairman & CEO Paul E. Jacobs sold 40,000 shares for $51.82, generating $2.1 million 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 QUALCOMM Incorporated here.
|P/E: 22.52||Forward P/E: 15.8||Industry P/E: 12.52|
|P/S: 6.49||Price/Book: 3.4||EV/EBITDA: 15.23|
|Market Cap: $92.35B||Avg. Daily Volume: 17,816,800||52 Week Range: $42.45 – $59.84|
3. Nordstrom Inc. (JWN): $50.7
Shares of this retail chain were sold by 2 insiders:
- Executive Vice President James F. Nordstrom Jr. sold 39,440 shares for $50.03, generating $1.9 million from the sale.
- Executive Vice President Kevin T. Knight sold 16,462 shares for $50.00, generating $823,101 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 Nordstrom Inc. here.
|P/E: 16.84||Forward P/E: 14.16||Industry P/E: 14.92|
|P/S: 1.03||Price/Book: 5.29||EV/EBITDA: 7.99|
|Market Cap: $10.78B||Avg. Daily Volume: 3,658,810||52 Week Range: $35.92 – $52.15|
4. Acme Packet, Inc. (APKT): $41.25
Chief Technology Officer Patrick J. Melampy sold 60,000 shares of this network equipment company for $39.86, generating $2.4 million from the sale.
You can view the list of recent insider transactions for Acme Packet, Inc. here.
|P/E: 55.15||Forward P/E: 27.68||Industry P/E: 12.52|
|P/S: 9.36||Price/Book: 6.61||EV/EBITDA: 26.5|
|Market Cap: $2.73B||Avg. Daily Volume: 2,896,310||52 Week Range: $35.7 – $84.5|
5. NIC Inc. (EGOV): $12.3
Director Ross C. Hartley sold 176,795 shares of this eGovernment services provider for $11.85, generating $2.1 million from the sale. These shares were sold indirectly by Ross C. Hartley Investments, LLC.
You can view the list of recent insider transactions for NIC Inc. here.
|P/E: 37.27||Forward P/E: 28.6||Industry P/E: 24.27|
|P/S: 4.45||Price/Book: 11.33||EV/EBITDA: 18.15|
|Market Cap: $788.31M||Avg. Daily Volume: 268,536||52 Week Range: $8.24 – $13.8|
You can view the full list of sales from this Insider Sales page.
Disclosure: See author's portfolio holdings here.