Analyzing Tuesday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Tuesday, January the 10th, they bought and sold stock in over 150 separate transactions in over 80 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime near or after the end of last 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 Tuesday; 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 buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

Lululemon Athletica (NASDAQ:LULU): LULU operates and franchises yoga inspired athletic apparel stores for women, men and female youth in North America and Australia. On Tuesday, Chairman of the Board and Chief Innovation and Branding Officer Dennis (Chip) Wilson filed SEC Form 4 indicating that he exchanged 300,000 shares of Lulu Canadian Holding, Inc., into an equal number of LULU common stock and sold those resulting shares and an additional 148,200 shares for $26.1 million, all under a 10b5-1 plan.

Following the sale, Mr. Wilson now holds 10.3 million shares in indirect holdings via LIPO Investments (and an additional 32.9 million derivative securities in direct holdings). Mr. Wilson is the founder of the company, and recently announced plans to resign his executive position of Chief Innovation and Branding Officer effective January 29; he will continue to serve as Chairman of the Board of Directors. So far, since the beginning of October, Mr. Wilson has reported selling 1.1 million shares. 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 five-fold since its IPO in 2007, and it currently trades at a premium 40-41 forward P/E compared to the average of 16.1 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. The stock gapped up strongly on Tuesday this week after the company boosted its outlook for Q4, based on a strong consumer reaction to its holiday assortment.

Lyondellbasell Industries NV (NYSE:LYB): LYB is a Netherlands-based manufacturer of polypropylene compounds, propylene oxide, polyethylene, ethylene and propylene. On Tuesday, CEO James Gallogly filed SEC Form 4 indicating that he exercised options and sold the resulting 156,639 shares for $5.5 million, under a 10b5-1 plan. LYB has been trading up recently and is almost flat for the year (up less than 10%), and it trades at a current 7 P/E on a TTM basis compared to the average of 11.7 for the diversified chemicals group.

Liberty Property Trust (LRY): LRY is a publicly owned REIT that provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties in the U.S. and the U.K. On Tuesday, Chairman & CEO William Hankowsky filed SEC Form 4 indicating that he exercised options and sold the resulting 100,362 shares for $3.2 million. LRY has been in a relatively narrow trading range, mostly between $28 and $36, over the past year, and it trades at 11.0 times funds from operations (P/FFO) compared to the 11.3 average for its peers in the equity trust REIT group.

Macy's Inc. (NYSE:M): Macy's operates 850 department stores in 45 states, D.C., Puerto Rico and Guam. On Tuesday, two insiders, Chief Marketing Officer Peter Sachse and Chief Merchandising Officer Jeffrey Gennette, sold a total of 46,734 shares for $1.6 million. Of those, Mr. Sachse's 41,000 shares that were sold were acquired by exercising options. In comparison, insiders sold 0.4 million shares in the past three months. Macy's shares have done well in the past year, up over 45%, and it trades at a discount 10-11 forward P/E, and at 2.5 P/B, compared to averages of 13.2 and 1.6 for the regional department stores group.

On top of these, some additional large insider trades on Tuesday included a $3.5 million sale by Chairman & CEO Gerald Rubin at brand name consumer products provider Helen of Troy Ltd. (NASDAQ:HELE); and a $1.2 million sale by COO Esther Stearns and MD of Custom Clearing Services, Jonathan Eaton, at LPL Investment Holdings (NASDAQ:LPLA), a provider of brokerage and investment advisory services.

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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