Analyzing Friday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Friday, January the 6th, they bought and sold stock in just under 150 separate transactions in over 85 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 150 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 Friday; notable based on the dollar amount sold, the number of insiders selling, based on whether the shares sold represent a significant portion of that insiders holding in the company, or based on whether the overall selling represents a strong pick-up based on historical selling in the stock:

Vical Inc. (NASDAQ:VICL): VICL develops DNA-based vaccines and therapeutics to prevent and treat cancer and cardiovascular and infectious diseases. Insiders currently hold 9.3 million or 12.9% of outstanding shares. On Friday, 10% owner James Singer filed SEC Form 4 indicating that he purchased 72,000 shares in the name of CDEF LLC, a Maine LLC over which he has indirect control, for $0.3 million, thereby boosting his VICL holdings to 7.34 million or 10.2% of outstanding shares.

Singer is the sole member of CDEF LLC, and his 10.2% holding of VICL shares ranks him just behind VICL's largest institutional holders Federated Investors (9.4 million shares) and Fidelity Investments (7.5 million shares). His CDEF LLC company has been accumulating shares recently, as it reported holding 3.7 million or 5.2% of VICL outstanding shares in a SC 13G/A filing with the SEC in his prior filing in February of last year. VICL shares have been among the best performers in the biotech group last year, up over 120% in 2011, buoyed on positive developments in its pipeline, particularly on its lead product Allovectin being tested in phase 3 trials for metastatic melanoma. On Friday, shares took a dive, falling 8.5%, after the company announced its intention for a secondary offering of yet undisclosed size.

Starwood Hotels & Resorts Worldwide (HOT): HOT is one of the world's largest hotel and leisure companies, primarily operating luxury and upscale full service hotels and resorts under the brand names of St. Regis, The Luxury Collection, W, Westin, Le Meridien, Sheraton, Four Points, Allott and Element. Insiders hold 2.1 million or 1.1% of outstanding shares. On Friday, CEO Frits van Paasschen filed SEC Form 4 indicating that he sold 33,272 shares for $1.62 million, under a 10b5-1 plan, and ended with 0.16 million shares after the sale. Overall, insiders sold only an additional 28,179 shares during the last three months, and they sold a total of 0.42 million shares (buying none) in the past year.

HOT shares currently trade at a discount 22-23 forward P/E and 3.3 P/B compared to averages of 26.1 and 25.0 for its peers in the hotel and motel group. Meanwhile, earnings, are projected to rise strongly from $1.25 in 2010 to $2.25 in 2012 at an annual rate of 34.2% based on expectations that the lodging sector will rebound going forward, and that HOT's diversified global exposure to some of the world's top growing markets will help it capture some of that growth.

Lululemon Athletica (NASDAQ:LULU): LULU operates and franchises yoga inspired athletic apparel stores for women, men and female youth in North America and Australia. Insiders currently hold 1.1 million or 0.9% of outstanding shares. On Friday, Chief of Innovation and Branding Dennis Wilson filed SEC Form 4 indicating that he exchanged 400,000 shares of Lulu Canadian Holding, Inc., into an equal number of LULU common stock and sold 251,800 of the resulting shares for $12.9 million, holding 148,200 shares in direct and another 10.33 million shares in indirect holdings after the sale.

So far, in the last three months, Mr. Wilson has reported selling 651,800 shares for over $30 million. In comparison, insiders sold a total of 1.75 million shares (buying none) in the past year. LULU has been among the strongest performers in the retail sector, up more than four-fold since its IPO in 2007, and it currently trades at a premium 36-37 forward P/E and 14.3 P/B compared to averages of 16.1 and 3.1 for the apparel and shoe retail category, while earnings are projected to rise at a strong 36.9% annual rate from 79c in 2011 to $1.48 in 2013.

Delcath Systems Inc. (NASDAQ:DCTH): DCTH is a development stage company that operates as a specialty pharmaceutical and medical device company. It has developed the Delcath System to isolate the liver from the general circulatory system and to administer chemotherapy and other therapeutic agents directly to the liver. Insiders currently own 3.4 million or 7.9% of outstanding shares. On Friday, EVP and Chief Medical Officer Krishna Kandarpa filed SEC Form 4 indicating that he sold 34,606 shares for $0.13 million, under a 10b5-1 plan, and that he holds 150,000 shares after the sale.

Overall, insiders sold only an additional 100,000 shares since 2008. DCTH shares were among biotech's top losers last year, down almost 70% in 2011; however shares have been rallying ever since the company announced on December 21st that it appointed highly respected hepatologist and 2011 President of the International Liver Cancer Association, Dr. Gregory Gores, to its Medical Advisory Board.

Aastrom Biosciences (ASTM): ASTM develops autologous cell therapies (i.e., tissue transplantation from the same person) for the treatment of severe and chronic cardiovascular diseases. Insiders hold 1.3 million or 4.6% of outstanding shares. On Friday, CFO Scott Durbin filed SEC Form 4 indicating that he sold 40,000 shares for $72,000, ending with no direct and 850 shares in indirect holdings in the company. Although the dollar amount sold is small, this is significant as it represents most of CFO Durbin's holdings in the company, and given that insider selling is extremely uncommon at ASTM. In fact, the last time insiders sold was in 2006. ASTM shares have been trading down ever since it reported 12-month results from its phase 2 trial in patients with critical limb ischemia on November 14th.

On top of these, some additional large insider trades on Friday included a $1.6 million sale (under a 10b5-1 plan) by EVP and Chief Science Officer George Yancopoulos at development stage biotech Regeneron Pharmaceuticals Inc. (NASDAQ:REGN); a $1.3 million sale by President Timothy O'Connor and by corporate insider Indaba Capital Management at commercial mortgage REIT Gramercy Capital Corp. (GKK); a $9.4 million sale (under 10b5-1 plans) by Chairman & CEO Michael Johnson at Herbalife Ltd. (NYSE:HLF), a network marketer offering weight management, nutritional supplements, and skin and hair care products to its members; a $5.2 million sale (under 10b5-1 plans) by CFO Jack Hartung and Co-CEO Montgomery Moran at Chipotle Mexican Grill (NYSE:CMG), an operator of casual Mexican food restaurants in the U.S., Canada and U.K.; and a $0.4 million sale by eight insiders at integrated telecommunications service provider Level 3 Communications (NASDAQ:LVLT).

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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