Insiders reported that on Friday December the 9th, they bought and sold $458 million of stock in over 330 separate transactions in 187 different companies, including selling $386 million worth of stock and buying $72 million worth of stock. These transactions have to be reported within two days of the trade, so the transactions reported yesterday occurred sometime after the middle of last week. We culled through these 330 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 Friday (for a general discussion on how to interpret insider trades, please look at the end of this article):
GMX Resources (GMXR): GMXR is engaged in the exploration and production of oil and natural gas in the U.S. It has interests in two oil shale resources, including the Williston Basin in ND and MT, and the DJ Basin in WY. Insiders currently hold 7.3 million or 12.7% of outstanding shares. On Friday, Director Thomas Casso purchased 20,000 shares. This is in addition to the 148,000 shares that we reported four other insiders reported buying on Wednesday this week. Insider buying is relatively unusual at GMXR, where prior to the buys reported this week, insiders bought only an additional 36,500 shares during the past year. GMXR shares currently trade at the lows after a rough three years during which they have dropped from an $88 high in 2008 to below $2 currently as concerns have mounted over poor operating results (the company has missed on its earnings for each of the last four quarters) and liquidity issues. Although very speculative, GMXR holds promise due to its natural gas reserves, hence the heavy insider buying by multiple insiders this week can be interpreted as a sign that shares may have bottomed out at these levels.
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. On Friday, CFO Bradley Schiller reported purchasing 11,000 shares. This is in addition to the 11,000 shares that he reported purchasing on Wednesday, and the 32,500 shares that he reported purchasing on Monday, so that over the past week, CFO Schiller has reported purchasing 54,500 shares, a new position for him in his portfolio. 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.
ON Semiconductor Corp. (ONNN): ONNN is a supplier of broadband and power management ICs and standard semiconductors used in fiber-optic networking equipment and portable electronics. Insiders currently hold 4.6 million or 1.0% of outstanding shares. On Friday, two insiders reported selling a total of 110,000 shares, including COO John Nelson (100,000 shares) and SVP & General Counsel George Cave (10,000 shares), both regular sales. This is significant due to the number of insiders selling, and the fact that it is pick-up in selling given that insiders sold only an additional 117,500 shares in the past three months (buying none). ONNN recently reported in-line revenues and earnings for its Q3, and it trades at 12-13 forward P/E compared to the 19.3 average for its peers in the analog & mixed semiconductor group.
Mako Surgical Corp. (MAKO): MAKO develops proprietary advanced robotic arm solutions and orthopedic implants used in minimally invasive orthopedic knee procedures. Insiders currently hold 3.4 million or 8.2% of outstanding shares. On Friday, Director Frederic Moll purchased 5,000 shares for $0.13 million. This is unusual in that insider buying is relatively uncommon at MAKO, as in the past year insiders purchased only an additional 6,700 shares (selling 616,736 shares). MAKO currently generates losses and has negative cash flow, and it trades at 10.2 P/B compared to the 5.6 average for the medical instruments group.
Yum! Brands (YUM): YUM is one of the world’s largest restaurant companies, and it operates and franchises over 37,000 fast food restaurants including Pizza Hut, Taco Bell, and KFC in over 110 countries. Insiders currently hold 2.4 million or 0.5% of outstanding shares. On Friday, three insiders reported that they exercised options and sold the resulting total of 888,235 shares for $51.6 million. This included Chairman & CEO David Novak (824,574 shares), CEO of KFC Roger Eaton (60,608 shares) and Chief Public Affairs Officer David Blum (3,053 shares). Of these, CEO Novak’s sales were regular sells, and Mr. Eaton and Mr. Blum sold their shares pursuant to 10b5-1 plans. YUM trades at a fair 18 forward P/E and 13.3 P/B compared to averages of 18.2 and 10.4 for the restaurant group.
Acme Packet Inc. (APKT): APKT manufactures session border controllers, load balancers, routing proxies and multi-service security gateways. Its products are used in session delivery networks that enable delivery of next-generation voice, video and unified communications over IP networks. Insiders currently hold 8.2 million or 12.6% of outstanding shares. On Friday, Chief Technology Officer Patrick Melampy reported selling 60,000 shares for $2.0 million (regular sell). This is significant in that it is a large sell, and that it is a pick-up in selling given that insiders sold only a total of 397,000 shares in the past three months.
Republic Services Inc. (RSG): RSG provides non-hazardous solid waste collection services for commercial, industrial, municipal and residential customers. Insiders currently hold 65.0 million or 17.2% of outstanding shares. On Friday, 10% owner and Microsoft (MSFT) founder Bill Gates purchased 1.4 million shares for $38.1 million, increasing his position in the company to 62.6 million shares. RSG currently trades at 13-14 forward P/E compared to the 40.3 average for its peers in the pollution control group.
Macy’s Inc. (M): Macy’s operates 850 department stores in 45 states, D.C., Puerto Rico and Guam. Insiders currently hold 0.7 million or 0.2% of company shares. On Friday, Chief Merchandising Planning Officer Julie Weiser exercised options and then sold the resulting 39,750 shares (regular sell) for $1.3 million, her entire holding in the company. This is on top of the insider sales that we reported earlier in the week, when two other insiders sold a total of 68,000 shares for $2.2 million. Insider selling has recently picked up at Macy’s, with a total of 191,750 shares reported sold in the last week and a half. In comparison, insiders sold only an additional 149,200 shares in the last three months (buying none). Macy’s shares have done well this year, up over 30%, and it trades at a discount 10-11 forward P/E, and at 2.4 P/B, compared to averages of 13.2 and 1.6 for the regional department stores group.
Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.