Insider Weekends - January 15, 2016

by: Asif Suria

Summary

Last week, we mentioned that the big drop marked the worst start of the year in the history of the S&P 500 index and the trend continued this week.

Notable insider buys this week: CONN, TUES, FSIC, AEO, and BH.

Notable insider sales this week: CRM, SRE, SNCR, HII, and VGR.

Welcome to edition 291 of Insider Weekends. Last week, we mentioned that the big drop marked the worst start of the year in the history of the S&P 500 index and the trend continued this week. The 9-day drop in the S&P 500 this year is also the worst in history. In isolation, this data point means little and it is hard to extrapolate this performance to the rest of the year. There are many factors that could cause the market to weaken further or recover. Will the fed continue raising rates? Will China's economy continue to weaken? Will Canada see its real estate bubble pop? Will the U.S. dollar continue to strengthen? Will North Korea continue its chest thumping leading to an arms race between the Koreas? Has the commodities bear market bottomed? Will investors flock to Europe on account of further monetary easing across the pond? Each of these events will have an impact on the direction of the market but from the vantage point to a six-year old bull market, the risk appears to be on the downside.

Insider buying declined last week with insiders buying $66.27 million of stock compared to $132.61 million in the week prior. Selling also decreased with insiders selling $212.11 million of stock last week compared to $439.57 million in the week prior. This is the lowest amount of insider selling we have seen in over four years.

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 dropped to 3.2. In other words, insiders sold more than 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 3.31. 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 January 15, 2016

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) or 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. Conn's Inc. (NASDAQ:CONN): $13.62

Shares of this specialty retailer of home appliances were acquired by three insiders:

  • 10% Owner Harriet C. Stephens acquired 120,000 shares, paying $16.76 per share for a total amount of $2.01 billion. These shares were purchased indirectly through a trust.
  • 10% Owner Curtis F. Bradury Jr. acquired 29,399 shares, paying $17.01 per share for a total amount of $500,077.
  • Director Douglas H. Martin acquired 21,077 shares, paying $16.46 per share for a total amount of $347,000. These shares were purchased indirectly through IRA.

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

P/E: 11.07 Forward P/E: 7.02 Industry P/E: 10.21
P/S: 0.3 Price/Book: 0.81 EV/EBITDA: 14.7
Market Cap: $439.18M Avg. Daily Volume: 830,946 52-Week Range: $13.18-$43.95
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2. Tuesday Morning Corporation (NASDAQ:TUES): $5.94

Chief Executive Officer Steven R. Becker acquired 1,055,467 shares of this home products retailer, paying $5.14 per share for a total amount of $5.43 million. These shares were purchased indirectly by Western Family Value, LLC.

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

P/E: 24.96 Forward P/E: 14.49 Industry P/E: 25.55
P/S: 0.28 Price/Book: 1.19 EV/EBITDA: 9.37
Market Cap: $263.30M Avg. Daily Volume: 618,494 52-Week Range: $4.86-$21.52
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3. FS Investment Corporation (NYSE:FSIC): $7.97

Chief Executive Officer Michael C. Forman acquired 180,611 shares of this business development company, paying $8.33 per share for a total amount of $1.5 million. These shares were purchased indirectly by Franklin Square Holdings, L.P.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $N/A Avg. Daily Volume: N/A 52 Week Range: $6.91 - $10.52
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4. American Eagle Outfitters, Inc. (NYSE:AEO): $14.31

Exec Chairman & CEO Jay L. Schottenstein acquired 164,257 shares of this apparel chain, paying $13.22 per share for a total amount of $2.17 million. These shares were purchased indirectly by SEI, Inc.

You can view the list of recent insider transactions for American Eagle Outfitters, Inc. here.

P/E: 14.17 Forward P/E: 12.34 Industry P/E: 16.03
P/S: 0.81 Price/Book: 2.34 EV/EBITDA: 5.23
Market Cap: $2.79B Avg. Daily Volume: 5,847,790 52 Week Range: $13.14 - $18.49
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5. Biglari Holdings Inc. (NYSE:BH): $336.06

Chairman and CEO Sardar Biglari, acquired 6,145 shares of this restaurant holding company, paying $335.52 per share for a total amount of $2.06 million. These shares were purchased indirectly by The Lion Fund.

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

P/E: 1.65 Forward P/E: 26.25 Industry P/E: 23.14
P/S: 0.75 Price/Book: 1.44 EV/EBITDA: 14.26
Market Cap: $694.64M Avg. Daily Volume: 3,387 52-Week Range: $321-$459.43
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You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. salesforce.com, inc. (NYSE:CRM) : $70.86

Shares of this software-as-a-service (SAAS) provider were sold by 4 insiders:

  • Chairman of the Board & CEO Marc Benioff sold 62,500 shares for $72.73, generating $4.55 million from the sale.
  • Co-Founder Parker Harris sold 5,000 shares for $74.14, generating $370,700 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Craig Conway sold 400 shares for $70.00, generating $28,000 from the sale.
  • Director John Victor Roos sold 267 shares for $73.97, generating $19,750 from the sale.

You can view the list of recent insider transactions for salesforce.com, inc. here.

P/E: N/A Forward P/E: 71.58 Industry P/E: 31.08
P/S: 7.7 Price/Book: 10.21 EV/EBITDA: 119.45
Market Cap: $47.05B Avg. Daily Volume: 3,614,810 52-Week Range: $55.45-$82.9
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2. Sempra Energy (NYSE:SRE): $91.99

Shares of this gas utility were sold by 2 insiders:

  • Executive VP and CFO Joseph A. Householder sold 23,761 shares for $91.47, generating $2.17 million from the sale.
  • Senior VP G Joyce Rowland sold 11,428 shares for $88.20, generating $1 million from the sale.

You can view the list of recent insider transactions for Sempra Energy here.

P/E: 18.08 Forward P/E: 17.16 Industry P/E: 15.8
P/S: 2.25 Price/Book: 1.99 EV/EBITDA: 12.18
Market Cap: $22.83B Avg. Daily Volume: 1,330,390 52-Week Range: $86.72-$116.21
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3. Synchronoss Technologies, Inc. (NASDAQ:SNCR): $30.6

CEO and Chairman Stephen G. Waldis sold 94,430 shares of this application software company for $30.80, generating $2.91 million from the sale. 31,430 of these shares were sold as a result of exercising options immediately prior to the sale.

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

P/E: 28.62 Forward P/E: 12.19 Industry P/E: 31.08
P/S: 2.4 Price/Book: 2.23 EV/EBITDA: 8.51
Market Cap: $1.35B Avg. Daily Volume: 427,883 52 Week Range: $27.86 - $52.45
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4. Huntington Ingalls Industries, Inc. (NYSE:HII): $123.65

Corp VP and CFO Barbara A. Niland sold 20,261 shares of this ship building company for $130.00, generating $2.63 million from the sale.

You can view the list of recent insider transactions for Huntington Ingalls Industries, Inc. here.

P/E: 14.85 Forward P/E: 13.18 Industry P/E: 17.4
P/S: 0.83 Price/Book: 3.96 EV/EBITDA: 6.73
Market Cap: $5.81B Avg. Daily Volume: 313,073 52 Week Range: $102.76-$144
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5. Vector Group Ltd. (NYSE:VGR): $22.78

Director Bennett S. Lebow sold 100,000 shares of this cigarettes company for $22.93, generating $2.29 million from the sale. These shares were sold indirectly by LeBow Epsilon 2001 Limited Partnership.

You can view the list of recent insider transactions for Vector Group Ltd. here.

P/E: 43.64 Forward P/E: 28.48 Industry P/E: 18.57
P/S: 2.38 Price/Book: N/A EV/EBITDA: 12.1
Market Cap: $2.79B Avg. Daily Volume: 674,690 52-Week Range: $19.64-$25.6
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You can view the full list of sales from this Insider Sales page.

Disclaimer Clients of Signal Partners, LLC and I may have positions in any of these stocks at any time. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.