Seeking Alpha
Profile| Send Message| ()  

Happy New Year and welcome to edition eighty two of Insider Weekends. Insider buying decreased with insiders purchasing $11.03 million of their stock last week compared to $58.41 million in the week prior. Selling also decreased with insiders selling $353.4 million worth of stock last week compared to $1.06 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 32. In other words, insiders sold 32 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 18.11.We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio December 30, 2011

Insider Sell Buy Ratio December 30, 2011

Note: As mentioned in the first post in this series Introduction to Insider Weekends, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. Chimera Investment Corporation (CIM): $2.51

Shares of this mortgage REIT were acquired by 3 insiders:

  • Director Gerard Creagh acquired 119,252 shares, paying $3.92 per share for a total amount of $467,750. Mr. Creagh increased his stake by 161.41% to 193,134 shares with this purchase. 100,000 of Mr. Creagh’s shares were acquired in February and the filing for that portion is late.
  • Director Paul A. Keenan acquired 19,526 shares, paying $2.74 per share for a total amount of $53,501. Mr. Keenan increased his stake by 23.87% to 101,321 shares with this purchase.
  • Director John Patrick Reilly acquired 19,070 shares, paying $2.74 per share for a total amount of $52,252. Mr. Reilly increased his stake by 30.60% to 81,391 shares with this purchase.

You can view the list of recent insider transactions for Chimera Investment Corporation here.

P/E: 4.58Forward P/E: 5.46Industry P/E: 14.03
P/S: 4.27Price/Book: 0.78EV/EBITDA: N/A
Market Cap: $2.58BAvg. Daily Volume: 12,330,20052 Week Range: $2.38 – $4.34

2. Kronos Worldwide Inc. (KRO): $18.04

Chairman of the Board Harold C. Simmons acquired 25,000 shares of this titanium dioxide producer, paying $17.85 per share for a total amount of $446,216. Mr. Simmons increased his stake by 4.82% to 543,440 shares with this purchase.

We have covered Mr. Simmons’ purchases of Kronos, Valhi (VHI), NL Industries (NL) and a host of other companies several times in the past. Following one of his purchases in September, we wrote the following,

We see several purchases by Mr. Simmons almost on a daily basis but most of these purchases are indirect purchases through one of several companies that he either owns a stake in or serves as the Chairman of the Board. You can see his insider transactions across all these companies here.

This particular purchase is more personal and appears to be sizable until you consider that the 79 year old Mr. Simmons has an estimated net worth of $5.7 billion. For a less flattering profile of Harold Simmons check out this article titled “Harold Simmons Is Dallas’ Most Evil Genius“. The stock is down more than 35% over the last two months and appears to be reasonably valued at 7 times EBITDA.

The stock has gotten even cheaper since then and now trades for less than 5 times EBITDA and sports a dividend yield of 3.3%.

You can view the list of recent insider transactions for Kronos Worldwide Inc. here.

P/E: 7.59Forward P/E: 5.93Industry P/E: 9.14
P/S: 1.12Price/Book: 2.37EV/EBITDA: 4.58
Market Cap: $2.09BAvg. Daily Volume: 777,76952 Week Range: $14.16 – $34.5

3. Fastenal Company (FAST): $43.61

Executive Vice-President Nicholas J. Lundquist acquired 10,000 shares of this industrial and construction materials company, paying $43.30 per share for a total amount of $433,050. Mr. Lundquist increased his stake by 9.01% to 121,000 shares with this purchase.

Fastenal has seen its business improve to near pre-recession levels and has posted several quarters of top line as well as bottom line growth. Operating margins of over 20% are impressive given the type of business the company engages in.

The balance sheet is very strong with a current ratio of 5.56, no debt and $137 million in cash and investments. Their growth has not gone unnoticed and the stock trades very close to its 52 week high and also sports a very rich valuation. The company trades at nearly 22 times EBITDA and over 9 times book value.

You can view the list of recent insider transactions for Fastenal Company here.

P/E: 38.59Forward P/E: 30.93Industry P/E: 11.32
P/S: 4.95Price/Book: 9.29EV/EBITDA: 21.8
Market Cap: $12.87BAvg. Daily Volume: 2,377,63052 Week Range: $28.81 – $44.4

4. NII Holdings Inc. (NIHD): $21.3

President, Nextel Argentina Ruben Butvilofsky acquired 15,275 shares of this wireless communications company, paying $20.89 per share for a total amount of $319,059. Mr. Butvilofsky increased his stake by 92.28% to 31,828 shares with this purchase.

This is the fourth insider purchase at NII Holdings this month. Other purchases included purchases by the CFO and the General Counsel yesterday and a large 38,770 share purchase by the President of Nextel Brazil earlier this month. We wrote the following about the company following that purchase on December 12th,

Even as Sprint (S) rolls out its capital intensive network update plan to upgrade its network and get rid of the legacy iDen network it inherited as a result of its ill-fated acquisition of Nextel, the Nextel brand continues to live on in Latin America through NII Holdings (NIHD). The company provides wireless, push-to-talk two way radio service in Mexico, Brazil, Argentina, Peru, and Chile.

This is the first insider purchase at NII Holdings and comes even as the stock hit a new 52 week low today after losing more than half of its value since the start of the year. The company has done a great job growing revenue over the last three years as well as on a sequential quarter basis over the last four quarters. The stock trades at a very reasonable valuation of 3.24 times EBITDA and 1.7 times tangible book value and is worth exploring further.

You can view the list of recent insider transactions for NII Holdings Inc. here.

P/E: 12.02Forward P/E: 10.65Industry P/E: N/A
P/S: 0.55Price/Book: 1.13EV/EBITDA: 3.22
Market Cap: $3.65BAvg. Daily Volume: 3,197,24052 Week Range: $19.18 – $45.64

5. Esterline Technologies Corp. (ESL): $55.97

President & CEO Richard Bradley Lawrence acquired 3,960 shares of this aerospace products company , paying $56.03 per share for a total amount of $221,882. Mr. Lawrence increased his stake by 284.69% to 5,351 shares with this purchase.

You can view the list of recent insider transactions for Esterline Technologies Corp. here.

P/E: 13.11Forward P/E: 9.15Industry P/E: 15
P/S: 1Price/Book: 1.1EV/EBITDA: 7.92
Market Cap: $1.71BAvg. Daily Volume: 315,13352 Week Range: $47.48 – $82.28

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Franklin Resources Inc. (BEN): $96.06

Vice Chairman Rupert H. Johnson sold 200,000 shares of this asset management company for $95.40, generating $19.08 million from the sale. These shares were sold indirectly from an IRA.

You can view the list of recent insider transactions for Franklin Resources Inc. here.

P/E: 11.14Forward P/E: 9.9Industry P/E: 12.34
P/S: 2.92Price/Book: 2.45EV/EBITDA: 5.56
Market Cap: $20.88BAvg. Daily Volume: 1,483,81052 Week Range: $87.71 – $137.56

2. Carnival Corporation (CCL): $32.64

Shares of this cruise ship operator were sold by 7 insiders:

  • Vice Chairman & COO Howard S. Frank sold 124,603 shares for $33.16, generating $4.1 million from the sale.
  • President & CEO, HAL Stein Kruse sold 35,601 shares for $32.72, generating $1.2 million from the sale.
  • Sr. Vice President-Finance,CFO David Bernstein sold 17,800 shares for $32.72, generating $582,425 from the sale.
  • SVP, Gen Counsel & Secretary Arnaldo Perez sold 17,800 shares for $32.72, generating $582,425 from the sale.
  • President & CEO – PCL Alan Buckelew sold 11,920 shares for $32.72, generating $390,028 from the sale.
  • President & CEO, CCL Gerald Raymond Cahill sold 8,120 shares for $32.64, generating $265,048 from the sale.
  • Chief Accounting Officer Larry R. Freedman sold 2,431 shares for $32.72, generating $79,544 from the sale.

These shares were sold upon the vesting of restricted stock granted under the Company’s 2002 Stock Plan.

You can view the list of recent insider transactions for Carnival Corporation here.

P/E: 13.49Forward P/E: 10.56Industry P/E: 18.85
P/S: 1.62Price/Book: 1.07EV/EBITDA: 9.09
Market Cap: $25.36BAvg. Daily Volume: 4,516,58052 Week Range: $28.52 – $48.14

3. Ventas, Inc. (VTR): $55.13

Director Douglas M. Pasquale sold 58,750 shares of this healthcare REIT for $55.04, generating $3.23 million from the sale.

You can view the list of recent insider transactions for Ventas, Inc. here.

P/E: 43.89Forward P/E: 15.02Industry P/E: 43.74
P/S: 10.85Price/Book: 1.72EV/EBITDA: 26.05
Market Cap: $15.87BAvg. Daily Volume: 1,961,15052 Week Range: $43.25 – $57.45

4. Yahoo! Inc. (YHOO): $16.13

Chief Yahoo David Filo sold 166,500 shares of this internet media company for $16.14, generating $2.69 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Yahoo! Inc. here.

P/E: 19.74Forward P/E: 18.12Industry P/E: 24.07
P/S: 3.86Price/Book: 1.6EV/EBITDA: 12.76
Market Cap: $20.01BAvg. Daily Volume: 26,296,30052 Week Range: $11.09 – $18.84

5. Lululemon Athletica Inc. (LULU): $46.66

Founder, Chairman of the Board and Chief Innovation and Branding Officer Dennis J. Wilson sold 50,000 shares of this yoga and athletic apparel company for $47.81, generating $2.39 million from the sale.

You can view the list of recent insider transactions for Lululemon Athletica Inc. here.

P/E: 41.18Forward P/E: 31.53Industry P/E: 9.8
P/S: 7.72Price/Book: 12.86EV/EBITDA: 23.66
Market Cap: $6.69BAvg. Daily Volume: 3,514,50052 Week Range: $32.65 – $64.49

You can view the full list of sales from this Insider Sales page.

Disclosure: I have a long position in Esterline in my trading portfolio and I have a long position in Yahoo.

Source: Insider Buys And Sells: Chimera Investment Corporation, Lululemon Athletica