Insiders reported yesterday that they bought and sold $246 million of stock in over 400 separate transactions in 264 different companies, including $202 million worth of stock sold and $44 million worth of stock bought. These transactions have to be reported within two days of the trade, so the transactions reported yesterday occurred sometime late last week. We culled through these 400 or so insider buys and sells (based on yesterday’s SEC Forms 3, 4, and 5 filings), as part of our daily and weekly coverage of insider trades, and present here the most notable trades reported yesterday (for a general discussion on how to interpret insider trades, please look at the end of this article):
Gilead Sciences Inc. (GILD): GILD is a developer of therapeutics to treat viral, fungal, respiratory and cardiovascular diseases. Insiders currently hold 5.6 million or 0.7% of outstanding shares, and on Monday two insiders, CEO Martin and EVP Alton, reported that they exercised options and sold the resulting 46,020 and 8,000 shares respectively (under a 10b5-1 plan), for a total of $2.2 million. This is in addition to the 93,320 shares we reported as being sold by insiders just last month, for the week ending November 4th, so that insiders have sold a total 147,340 shares in just over a month.
This is significant due to its size and it represents a strong pick-up in insider selling given that for the last three months insiders sold only a total of 220,640 shares (buying none). GILD shares have performed well recently, up over 10% so far this year, as recent quarter operating results have beat estimates and there is optimism about its deep pipeline of drugs under development. Its shares trade at a discount 9-10 forward P/E, and at 5.0 P/B, compared to averages of 22.2 and 11.3 respectively for the biotech group.
Amazon.com Inc. (AMZN): AMZN is a leading online retailer in North America and internationally. Insiders currently hold 91.7 million or 21.4% of outstanding shares, and on Monday Sr. VP Marc Onetto reported that he exercised options to acquire 75,000 shares and sold 50,455 of the resulting shares for $9.9 million (under a 10b5-1 plan), ending the week with 36,683 shares. This is significant in that it is a large sale, and given that it is a strong pick-up in insider selling given that they sold only an additional 103,911 shares during the last three months.
AMZN shares overall have performed well this year, up almost 10% in 2011 versus the flattish performance for the internet index (HHH); however, lately shares have fallen due to poor operating performance in its Q3 reported at the end of October. AMZN shares trade at premium 96 forward P/E, and at 11.5 P/B, compared to averages of 70.5 and 5.4 respectively for the Internet commerce group.
Valeant Pharmaceuticals (VRX): VRX develops primarily branded drugs to treat central nervous system disorders, pain and cardiovascular disease. Insiders currently hold 0.2 million or 0.1% of outstanding shares, and on Monday CFO Bradley Schiller reported that he purchased 32,500 shares for $1.5 million, a new position for him in his portfolio. This is significant in that it is a large purchase, and also given that it is a strong pick-up in insider buying given that they purchased only an additional 3,400 shares during the last three months. VRX shares overall have performed well this year, up almost two-thirds so far in 2011 versus the 2% rise for the average pharmaceutical company, and they trade at discount 12-13 forward P/E, and at 3.5 P/B, compared to averages of 28.6 and 6.2 respectively for the pharmaceuticals group.
Denbury Resources (DNR): DNR is engaged in the acquisition, exploration, development and operation of oil and gas properties in the Gulf Coast region. Insiders currently hold 6.6 million or 1.7% of outstanding shares, and on Monday VP of Legal Raymond Dubuisson sold 63,183 shares for $1.1 million (regular sale), ending the week with 146,637 shares. This is significant in that it is a large sale, and it represents a significant portion of Mr. Dubuisson’s holdings in the company, and also since the last time insiders sold was in March this year. DNR shares trade at discount 13-14 forward P/E, and at 1.4 P/B, compared to averages of 21.5 and 5.3 respectively for the U.S. oil & gas exploration & production group.
AFLAC Inc. (AFL): AFL is a provider of health, accident, disability and life insurance in the U.S. and Japan. Insiders currently hold 3.8 million or 0.8% of outstanding shares, and on Monday Executive VP Joey Loudermilk sold 35,000 shares for $1.5 million (regular sale), ending the week with 181,237 shares. This is significant in that it is a large sale, and it represents a significant portion of Mr. Loudermilk’s holdings in the company, and also since the last time insiders sold was in May this year (selling only 196,258 shares in the past year). AFL shares trade at discount 6-7 forward P/E, and at 1.6 P/B, compared to averages of 15.3 and 1.3 respectively for the accident and health insurance group.
Transocean Ltd. (RIG): RIG provides offshore contract drilling for oil and gas wells worldwide. Insiders currently hold 0.5 million or 0.2% of outstanding shares, and on Monday CEO Steven Newman reported that he purchased 6,500 shares for $0.3 million, increasing his position in the company to 26,810 shares. This is significant given that insider buying is uncommon at RIG; in fact, with the exception of a smaller 1,000 share purchase in August, the last time insiders purchased RIG shares was in 2008. RIG has been extremely weak recently, and its shares trade near six-year lows, down by a third so far in 2011, as its quarter operating results have continued to disappoint investors. Its shares trade at a discount 12 forward P/E, and at 0.7 P/B, compared to averages of 12.2 and 1.4 respectively for the oil & gas drilling group.
Lone Pine Resources (LPR): LPR is engaged in oil and gas exploration, development and production in AB, BC and QC in Canada. It is a wholly owned subsidiary of Forest Oil Corp. (FST). Insiders currently hold 0.1 million or 0.1% of outstanding shares, and on Monday CEO David Anderson reported that he purchased 10,000 shares, adding to his 911 share prior position in the company. This purchase comes on the heels of a total of 4,500 shares purchased by two other insiders (a VP and a Director) just last week, and is significant given that the only other time insiders purchased LPR shares was a 15,000 share purchase by a Director at the time of its IPO in May. LPR shares have been cut in half since the IPO in May this year, and currently at a discount 8 forward P/E, and at 1.3 P/B, compared to averages of 15.2 and 1.5 respectively for the Canadian oil & gas exploration & production group.
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