Analyzing Tuesday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Tuesday December the 13th, they bought and sold $422 million of stock in almost 300 separate transactions in 192 different companies, including selling $149 million worth of stock and buying $273 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 300 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 Tuesday (for a general discussion on how to interpret insider trades, please look at the end of this article):

Altera Corp. (NASDAQ:ALTR): ALTR manufactures programmable logic devices, FPGAs, and application-specific ICs for telecom and industrial markets. Insiders currently hold 3.3 million or 1.1% of outstanding shares. On Tuesday, Director Robert Finocchio exercised options and sold the resulting 40,000 shares (regular sell) for $1.4 million, ending the day with 20,001 shares. Mr. Finocchio, a former CEO and Chairman of Informix Corp., has been a Director of ALTR since 2002, and he is also a private investor and part-time professor at Santa Clara University in Santa Clara, CA. ALTR currently trades near the lows, and is approximately flat for the year. It trades at a premium 16-17 forward P/E compared to the 13.3 average for its peers in the logic semiconductors group.

St. Jude Medical (NYSE:STJ): STJ develops cardiovascular medical devices for cardiac rhythm management, atrial fibrillation, cardiac surgery, cardiology and neuromodulation. Insiders currently hold 7.3 million or 2.2% of outstanding shares. On Tuesday, Group President Michael Rousseau exercised options and sold the resulting 75,000 shares as part of a 10b5-1 plan for $2.7 million, ending the day 19,529 shares. Overall, during the past three months, insiders sold only a total of 19,000 shares (buying none). STJ currently trades near its lows, and is down approximately 20% year-to-date. It trades at a discount 9-10 forward P/E and 2.5 P/B compared to averages of 97.3 and 3.7 for the medical products group.

Nordstrom Inc. (NYSE:JWN): JWN operates 207 high-end department stores in 28 states offering apparel, shoes, cosmetics and accessories for women, men and children. Insiders currently hold 17.8 million or 8.2% of outstanding shares. On Tuesday, President Blake Nordstrom exercised options and sold the resulting 106,466 shares (regular sell) for $5.1 million, ending the day with 1.62 million shares (and an additional 72 million shares in indirect holdings). Mr. Nordstrom is the great-grandson of John W. Nordstrom, a Swedish immigrant that founded the Seattle-area chain, and he represents the fourth generation of the Nordstrom family to run the company. He started as a stockperson in 1974, then sales manager after 9 years, then merchandising manager, and so on, working his way to the executive suite. JWN trades at 13 forward P/E compared to the average 13.5 for its peers in the apparel and shoe retail chain.

Gran Tierra Energy Inc. (NYSEMKT:GTE): GTE is engaged in oil and gas exploration in Colombia, Argentina, Peru and Brazil. Insiders currently hold 18.5 million or 7.5% of outstanding shares. On Tuesday, CEO Dana Coffield 300,000 shares (regular sell) for $1.5 million, ending the day with 2.2 million shares. This is in addition to the 200,000 shares that Mr. Coffield reported selling on Monday, so that together he sold 500,000 shares for $2.5 million in the last two days. Insider selling is not that common at GTE as the last time insiders sold prior this week was in January, and overall insiders sold only an additional 190,000 shares during the past year (buying only 20,000 shares). GTE currently trades near its lows, at a discount 8 forward P/E and 1.2 P/B compared to averages of 15.2 and 1.5 for the Canadian Exploration and Production group.

Dunkin’ Brands Group Inc. (NASDAQ:DNKN): DNKN franchises over 16,000 Dunkin’ Donuts and Baskin-Robbins Donut and Ice Cream shops in the U.S. and 56 foreign countries. Insiders currently hold 1.6 million or 1.3% of outstanding shares. On Tuesday, Director Jon Luther sold 36,446 shares (regular sell) for $0.9 million, ending the week with 1.3 million shares in direct and indirect holdings. Also, Bain Capital Investors LLC sold 633,385 shares for $15.7 million on Tuesday, ending the week with 22.2 million shares. Bain at the end of Q3 was the second largest holder of DNKN with 24.9% of the outstanding shares. DNKN just came public in late July this year, and currently it trades at 20-21 forward P/E and 4.1 P/B compared to averages of 18.2 and 10.6 respectively for the restaurant group.

Unum Group (NYSE:UNM): UNM offers group and individual disability insurance and group life insurance, mainly in the U.S. and U.K. Insiders currently hold 2.8 million or 0.8% of outstanding shares. On Tuesday, CEO Thomas Watjen exercised options and sold the resulting 312,230 shares for $6.7 million, ending the week with 0.9 million shares (and an additional 12.9 million shares in indirect ownership). UNM trades at 6-7 forward P/E, slightly below the forward 8 P/E average for its peers in the Insurance group, while earnings are projected to increase at 9% compound growth rate from $2.69 in 2010 to $3.17 in 2012.

On top of these, some additional large insider trades included a $3.6 million sell by CEO Nicholas Howley in aerospace/ defense company Transdigm Group Inc. (NYSE:TDG); a $6.2 million sell by Chairman Emeritus of the Board Herbert Simon in property REIT Simon Property Group Inc. (NYSE:SPG) that owns, operates, and develops regional malls, outlets and shopping centers; a $1.3 million sell by COO Awadhesh Sinha in fashion footwear company Steven Madden Ltd. (NASDAQ:SHOO); and an $11.9 million sell by eight insiders in discount retailer Dollar General Corp. (NYSE:DG).

Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and The information and data is believed to be accurate, but no guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.