Analyzing Thursday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Thursday December the 22nd, they bought and sold stock in over 310 separate transactions in 172 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime earlier this week. We culled through these 310 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 (for a general discussion on how to interpret insider trades, please look at the end of this article):

Western Refining Inc. (WNR): WNR refines and markets crude oil and refined products in West TX, AZ, NM, UT, CO and the mid-Atlantic region. Insiders hold 34.9 million or 39.3% of outstanding shares. On Thursday, two corporate and an institutional insider filed SEC Forms 4 indicated that they sold a total of 237,500 shares for $3.0 million, all under 10b5-1 plans. This included Chairman of the Board Paul Foster (127,500 shares), Director Ralph Schmidt (25,000 shares), and Franklin Mountain Investments Limited Partnership (85,000 shares). Franklin Mountain is an entity controlled by Paul Foster, who besides being current Chairman of the Board is also the founder and past CEO of WNR. Overall, insiders sold a total of 542,500 in the last month for almost $7 million. WNR trades at 4-5 forward P/E and 1.3 P/B compared to averages of 11.2 and 2.4 for its peers in the oil refining and marketing group.

Visa Inc. (V): V provides a global retail electronic payments network in support of the credit and debit payment programs of financial institutions. Insiders currently hold 0.7 million shares or 0.1% of outstanding shares. On Thursday, two insiders sold a total of 27,671 shares for $2.8 million. This included General Counsel Joshua Floum exercising options to acquire 5,330 shares and selling 15,251 shares, and ending with 21,728 shares; and CEO Joseph Saunders selling 12,420 shares from the Joseph W. & Sharon P. Saunders Trust over which he has indirect control. Both sales were made pursuant to 10b5-1 trading plans. These are significant in that they are large sells, and also given that they represent a pickup in selling given that insiders sold only a total of 145,144 shares (buying none) over the past year. Visa shares have been among the top gainers among large-caps this year, up 44% YTD, and they trade at 14-15 forward P/E and 2.6 P/B compared to averages of 13.2 and 6.2 for its peers in the financial transaction services group.

Toll Brothers Inc. (TOL): TOL builds single-family detached and attached homes in luxury residential communities in the U.S. It is also involved in the building or converting of existing rental apartment buildings into high-, mid- and low-rise luxury homes; and developing, owning, and operating golf courses and country clubs associated with planned communities. Insiders currently hold 12.3 million or 7.7% of outstanding shares. On Thursday, two insiders sold a total of 1.02 million shares for $21.0 million. This included Executive Chairman Robert Toll exercising options to acquire 100,000 shares and selling 1.0 million shares, and Director Carl Marbach exercising options to acquire 17,000 shares and selling 20,000 shares. Overall, insiders at TOL have so far sold 1.2 million shares this month, a strong pickup in selling given that insiders sold only an additional 2.0 million shares during the past year (buying none). TOL currently trades at a premium at 27-28 forward P/E compared to the 20.8 average for the residential and commercial building construction group.

Rentech Inc. (RTK): RTK is engaged in the commercialization of its proprietary Rentech-SilvaGas biomass gasification process that converts multiple biomass feedstocks into synthesis gas (syngas) for the production of renewable fuels and power. Insiders currently hold 10.9 million or 5.1% of outstanding shares. On Thursday, Director John Williams reported that he exercised options to acquire 74,000 shares and sold 1.6 million shares for $2.1 million, ending with no shares (and 74,000 derivative securities). Also, CEO Hunt Ramsbottom reported on Thursday that he bought 10,000 shares for $14,000. RTK shares almost tripled earlier this year in October, just in advance of the launch of the IPO of its fertilizer unit, Rentech Nitrogen Partners (RNF), over which it still has majority control.

PNC Financial Services Group (PNC): PNC operates as a diversified financial services company, offering retail banking, corporate and institutional banking, asset management, and residential mortgage banking services, via 2,470 branches in PA, NJ, DE, Washington D.C., and ten other states. Insiders currently hold 1.6 million or 0.3% of outstanding shares. On Thursday, EVP & Chief HR Officer Joan Gulley exercised options and sold the resulting 36,750 shares for $2.1 million, ending with 37,469 shares. Overall, during the past year, insiders sold only a total of 115,710 shares, so the sale yesterday represented a pick-up in selling activity. PNC trades at 9-10 forward P/E and 0.9 P/B compared to averages of averages of 8.7 and 0.8 for its peers among major regional banks.

Delta Air Lines Inc. (DAL) provides international and domestic passenger and cargo transportation in the U.S. and abroad, offering services to 357 destinations in 66 countries. Insiders currently hold 50.9 million or 6.0% of outstanding shares. On Thursday, President Edward Bastian reported that he sold 75,000 shares for $0.65 million, ending with 419,882 shares. Overall, insiders sold only an additional 25,000 shares over the last three months, and they sold a total of 450,400 shares (buying none) during the past year. DAL stock has been trading near the lows for a few months now, at a very attractive discount of 3-4 forward P/E and 5.7 P/B compared to averages of 11.0 and 1.6 respectively for its peers in the airline group. What DAL has needed is a catalyst to spring some life back into its shares, and recent speculation that it would be a prime beneficiary as AMR sheds capacity in its bankruptcy may be just what they need.

Cobalt International Energy (CIE): CIE is engaged in the exploration and production of oil primarily in the deepwater of the U.S. Gulf of Mexico, and in offshore Angola and Gabon in West Africa. Insiders currently hold 45.0 million or 11.6% of outstanding shares. On Thursday, Chief Exploration Officer James Farnsworth reported that he sold 80,000 shares for $1.1 million, ending with 2.3 million shares. This is significant in that it is a large sale, and the last time insiders sold was in August. CIE shares have rallied strongly recently, up 78% in the past five trading days after the company reported major developments in its activities in West Africa. Specifically, on Friday, Diamond Offshore (DO) disclosed in its 8-K that CIE had extended a $360,000/day lease for DO's Confidence oil rig, indicating that the rig was being used to search for crude oil in Angolan waters. And then this Tuesday, it reported signing a deal with Angola's government to explore for oil off its coast, which was followed by even more positive news on Wednesday when Goldman added CIE to its "Americas Buy" list and raised its price target of $21 from $14, well above where it traded at that time.

On top of these, some additional large trades included a $14.4 million sale by CEO JW Marriott Jr. in hotel chain Marriott Intl Inc. (MAR); an $18.2 million sale by EVP of Service Delivery & Technology Glen Salow in financial planning, advisory and brokerage firm Ameriprise Financial Inc. (AMP); a $19.7 million sale by Chairman Emeritus of the Board Herbert Simon in Simon Property Group Inc. (SPG), a REIT that owns, operates and develops regional malls, outlets and shopping centers; a $48.8 million sale by Chairman & CEO David Pyott in pharmaceutical drug developer Allergan Inc. (AGN); a $4.7 million sale by Director William Foley in title insurance and escrow services provider Fidelity National Financial Inc. (FNF); and a $2.1 million total purchase by six insiders at Inergy Midstream LP (NRGM), a company involved in the storage and transportation of natural gas and natural-gas liquids in northeastern U.S.

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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