Analyzing Thursday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Thursday December the 15th, they bought and sold stock in over 300 separate transactions in 181 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime earlier last week. We culled through these 300 or so insider buys and sells (based on 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 Thursday:

Staples Inc. (SPLS): Staples is an office products company that sells various office supplies and services, business machines, computers, and office furniture. It also provides high-speed, color and self-service copying, other printing services, faxing, and pack and ship services. Insiders currently hold 10.2 million or 1.4% of outstanding shares. On Thursday, Chairman and CEO Ronald Sargent reported that he exercised options to acquire 1.13 million shares and sold 0.99 million of the resulting shares (regular sell) for $14.4 million, ending the week with 1.26 million shares (in direct holdings). This is significant in that it is a large sell by the CEO, the shares sold represent a significant portion of his holdings in the company, and in that it is a significant pickup in selling given that insiders sold only an additional 520,500 shares in the last year. Staples shares are currently near 8-year lows, and are trading at a discount 9-10 forward P/E and 1.4 P/B compared to averages of 15.6 and 2.1 respectively for its peers in the miscellaneous/ diversified retail group.

Inhibitex Inc. (INHX): Inhibitex develops differentiated anti-infective products to prevent and treat serious viral and bacterial infections, including primarily shingles and chronic infections caused by hepatitis C virus (HCV). Insiders currently hold 21.9 million shares or 28.0% of outstanding shares. On Thursday, Director Christopher McGuigan, PhD, and Professor at Cardiff University, reported that he sold 50,000 shares for $0.72 million, as part of a 10b5-1 trading plan, ending the week with 465,950 shares. Insider selling has been intense at Inhibitex. In the last six weeks, since the end of October, four insiders have sold 547,246 shares, whereas in the past year they sold only an additional 1.26 million shares. Inhibitex shares have been in a strong surge since the company reported on November 4th the positive top-line safety and anti-viral data from the first cohort of its ongoing clinical trial of INX-189 in hepatitis C, rising as high as four-fold to the peak above $16 before dropping this Friday to close just above $10.

Neostem Inc. (NBS): Neostem develops proprietary cellular therapies based on adult stem cells in oncology, immunology and regenerative medicines in the U.S. and China. On Thursday, two insiders, CEO Robin Smith and Chief Medical Officer Andrew Pecora reported that they purchased 50,000 shares each for a total of $59,500. Although small, the buy is notable in that insider buying is relatively uncommon at Neostem, and in fact, insiders bought only an additional 5,000 shares in the last nine months. Also, the buy is particularly notable given that Neostem shares have been weak all year, down 60% YTD, and currently trade near all-time lows.

HMS Holdings Corp. (HMSY): HMS Holdings provides cost containment, revenue recovery, reimbursements and benefits coordination to government healthcare programs. Insiders currently hold 1.4 million or 1.7% of outstanding shares. On Thursday, two insiders, CEO William Lucia and EVP of Operations Sean Curtin reported that they exercised options and sold the resulting total of 22,500 shares for $0.69 million, both under 10b5-1 plans. Insider selling has recently picked up at HMS Holdings. During the past six weeks, since the end of October, insiders have sold a total of 0.18 million shares for over $5 million, compared to a total of 0.55 million shares sold over the past year. HMS Holdings shares have done well this year, up 44% YTD. The stock trades at 46 forward P/E and 7.2 P/B compared to averages of 36.9 and 6.5, respectively, for its peers in the medical information systems group.

Cerner Corp. (CERN): Cerner Corp. develops medical record, clinical workflow and financial management software applications for healthcare providers. Insiders currently hold 13.6 million or 8.1% of outstanding shares. On Thursday, Vice Chairman Clifford Illig reported that he sold 40,000 shares (regular sell) for $2.3 million. This is the first sell in the last three months, and over the past year, insiders sold a total of 0.37 million shares. Cerner Corp. shares trade at a discount 25 forward P/E and 4.3 P/B compared to averages of 36.9 and 6.5, respectively, for its peers in the medical information systems group.

On top of these, some additional large trades included a $1.9 million purchase by Director Frederic Eshelman at drug development collaboration company Furiex Pharmaceuticals Inc. (FURX); a $11.9 million sell by CEO Larry Young at non-alcoholic beverage manufacturer Dr. Pepper Snapple Group (DPS); a $2.2 million sell by CEO Jack Dunn at business advisory services provider FTI Consulting Inc. (FCN); a $2.1 million sell by two insiders, including CEO Dennis Kakures at business-to-business rental company McGrath Rentcorp (MGRC); a $12.7 million sell by CEO Ronald Havner at REIT Public Storage (PSA); and a $3.2 million sell by COO Scott Stephenson at proprietary actuarial and underwriting data provider Verisk Analytics (VRSK).

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.

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