Insider Weekends - February 5, 2016

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Includes: APD, CIT, EA, LMCA, MSFT, NEE, STX, TGI, TLMR, UNH
by: Asif Suria

Summary

Insider buying increased last week.

Notable insider buys this week: TGI, APD, STX, CIT, and TLMR.

Notable insider sales this week: MSFT, UNH, EA, LMCA, and NEE.

Welcome to edition 294 of Insider Weekends. Insider buying increased last week with insiders buying $87.63 million of stock compared to $27.94 million in the week prior. Selling also increased with insiders selling $825.55 million of stock last week compared to $267.17 million in the week prior.

The market took a turn for the worse last week with the S&P 500 dropping 3.1% for the week. Against this backdrop, Kinder Morgan (NYSE:KMI) declined -4.8% while Consol Energy (NYSE:CNX) continued rallying with a gain of 14.61% for the week. The big event last week was a drop of $84 or nearly 44% in LinkedIn (NYSE:LNKD) and "big data" company Tableau Software (NYSE:DATA) losing half its value with a drop of 49.44%.

Investors were disappointed by 2016 projections from both companies when they reported results on Friday. When reviewing LinkedIn's fourth quarter results and projections for 2016, I was surprised to see that the company expects "adjusted EBITDA" of $950 to $975 million in 2016 and stock-based compensation expenses of $630 million. Is it any surprise that if you are going to give away 2/3rd of your income to management and employees as stock-based compensation, investors are not going to want to own your stock? The collateral damage from this spread to other cloud software companies and one of them that is on my watch list, Atlassian Corporation Plc. (NASDAQ:TEAM), is now trading below its IPO price. This well-respected Australian software company still has its founders at the helm and makes the popular project management software called JIRA that is used by both small companies as well as Fortune 500 firms. As is usually the case with these high growth companies, the stock is trading for nearly 10 times trailing sales despite the recent drop.

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 9.42. In other words, insiders sold more than 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 9.56. 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 February 7, 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) 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. Triumph Group, Inc. (NYSE:TGI): $26.9

Shares of this aircraft components manufacturer were acquired by 3 insiders:

  • President & CEO Daniel J. Crowley acquired 250,000 shares, paying $25.51 per share for a total amount of $6.38 million.
  • Director Richard C. III acquired 18,000 shares, paying $23.95 per share for a total amount of $431,172. Mr. Richard C. III increased his stake by 4.24% to 442,104 shares with this purchase.
  • Director Dawne S. Hickton acquired 5,000 shares, paying $24.98 per share for a total amount of $124,889.

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

P/E: 11.27 Forward P/E: 4.88 Industry P/E: 16.96
P/S: 0.34 Price/Book: 0.61 EV/EBITDA: 6.32
Market Cap: $1.33B Avg. Daily Volume: 987,624 52-Week Range: $23-$70.68
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2. Air Products and Chemicals, Inc. (NYSE:APD): $135.6

Chairman, President and CEO Seifi Ghasemi acquired 50,000 shares of this supplier of industrial gases and performance material, paying $126.35 per share for a total amount of $6.32 million. Mr. Ghasemi increased his stake by 18.88% to 314,865 shares with this purchase.

You can view the list of recent insider transactions for Air Products and Chemicals, Inc. here.

P/E: 22.41 Forward P/E: 16.66 Industry P/E: 14.62
P/S: 3.03 Price/Book: 3.99 EV/EBITDA: 11.97
Market Cap: $29.24B Avg. Daily Volume: 1,682,100 52-Week Range: $114.64-$158.2
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3. Seagate Technology Public Limited Company (NASDAQ:STX): $31.59

Shares of this data storage company were acquired by 2 insiders:

  • Chairman and CEO Stephen J. Luczo acquired 200,000 shares, paying $30.17 per share for a total amount of $6.03 million. These shares were purchased indirectly through a trust.
  • President, CSES Philip G. Brace acquired 5,000 shares, paying $29.10 per share for a total amount of $145,500. Mr. Brace increased his stake by 50.35% to 14,930 shares with this purchase.

You can view the list of recent insider transactions for Seagate Technology Public Limited Company here.

P/E: 15.92 Forward P/E: 8.45 Industry P/E: N/A
P/S: 0.78 Price/Book: 5.24 EV/EBITDA: 6.82
Market Cap: $9.36B Avg. Daily Volume: 5,231,530 52-Week Range: $26.25-$63.39
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4. CIT Group Inc. (NYSE:CIT): $28.31

Shares of this financial services provider were acquired by 4 insiders:

  • Vice Chairman Steven T. Mnuchin acquired 114,623 shares, paying $27.77 per share for a total amount of $3.18 million.
  • Chairman & CEO John A. Thain acquired 50,000 shares, paying $27.31 per share for a total amount of $1.37 million. Mr. Thain increased his stake by 11.45% to 486,849 shares with this purchase.
  • Vice Chairman Ellen R. Alemany acquired 19,000 shares, paying $27.32 per share for a total amount of $519,023. Ms. Alemany increased her stake by 27.67% to 87,656 shares with this purchase.
  • Director Alan L. Frank acquired 2,000 shares, paying $27.72 per share for a total amount of $55,440. Mr. Frank increased his stake by 42.78% to 6,675 shares with this purchase.

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

P/E: 5 Forward P/E: 7.32 Industry P/E: 12.78
P/S: 2.08 Price/Book: 0.51 EV/EBITDA: N/A
Market Cap: $5.69B Avg. Daily Volume: 2,236,490 52-Week Range: $26.08-$49.27
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5. Talmer Bancorp, Inc. (NASDAQ:TLMR): $15.5

Shares of this regional bank were acquired by 5 insiders:

  • Chief Financial Officer Dennis L. Klaeser acquired 64,800 shares, paying $16.16 per share for a total amount of $1.05 million. Mr. Klaeser increased his stake by 73.18% to 153,350 shares with this purchase.
  • President & Chief Exec Officer David T. Provost acquired 30,500 shares, paying $16.23 per share for a total amount of $494,939. Mr. Provost increased his stake by 5.02% to 638,393 shares with this purchase.
  • Chairman Gary Torgow acquired 30,500 shares, paying $16.23 per share for a total amount of $494,939. Mr. Torgow increased his stake by 5.01% to 639,340 shares with this purchase.
  • Director Barbara J. Mahone acquired 5,000 shares, paying $16.22 per share for a total amount of $81,082. Ms. Mahone increased her stake by 13.97% to 40,800 shares with this purchase.
  • Vice Chairman Gary S. Collins acquired 3,000 shares, paying $16.16 per share for a total amount of $48,480. Mr. Collins increased his stake by 4.45% to 70,480 shares with this purchase.

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

P/E: 19.14 Forward P/E: 11.4 Industry P/E: 10.37
P/S: 3.39 Price/Book: 1.45 EV/EBITDA: N/A
Market Cap: $1.02B Avg. Daily Volume: 467,613 52-Week Range: $13.4-$18.71
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You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Microsoft Corporation (NASDAQ:MSFT): $50.16

Shares of Microsoft were sold by 2 insiders:

  • Founder Bill Gates sold 5,000,000 shares for $53.16, generating $265.79 million from the sale.
  • Chief Accounting Officer Frank H. Brod sold 4,000 shares for $54.85, generating $219,416 from the sale.

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

P/E: 35.5 Forward P/E: 16.34 Industry P/E: 24.44
P/S: 4.67 Price/Book: 5.37 EV/EBITDA: 11.14
Market Cap: $396.73B Avg. Daily Volume: 40,536,600 52-Week Range: $39.72-$56.85
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2. UnitedHealth Group Incorporated (NYSE:UNH): $111.72

Shares of this health insurance provider were sold by 2 insiders:

  • Director Richard T. Burke sold 50,000 shares for $113.69, generating $5.68 million from the sale.
  • Director William C. Ballard Jr. sold 8,000 shares for $114.93, generating $919,444 from the sale. 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 UnitedHealth Group Incorporated here.

P/E: 18.59 Forward P/E: 12.72 Industry P/E: 22.14
P/S: 0.7 Price/Book: 3.27 EV/EBITDA: 10.01
Market Cap: $106.48B Avg. Daily Volume: 4,003,830 52-Week Range: $95-$126.21
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3. Electronic Arts Inc. (NASDAQ:EA): $55.5

Shares of this video games company were sold by 2 insiders:

  • Chief Executive Officer Andrew Wilson sold 58,000 shares for $64.54, generating $3.74 million from the sale.
  • COO, EVP & Chief Comp. Officer Peter R. Moore sold 8,000 shares for $60.30, generating $482,424 from the sale.

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

P/E: 28.42 Forward P/E: 15.68 Industry P/E: 30.34
P/S: 4.27 Price/Book: 6.06 EV/EBITDA: 15.29
Market Cap: $17.25B Avg. Daily Volume: 4,663,850 52-Week Range: $53.86-$76.92
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4. Liberty Media Corporation (NASDAQ:LMCA): $33.04

Chairman of the Board John C. Malone sold 104,000 shares of this broadcasting company for $35.36, generating $3.68 million from the sale.

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

P/E: 120.58 Forward P/E: 34.06 Industry P/E: 18.95
P/S: 2.46 Price/Book: 1.05 EV/EBITDA: 12.04
Market Cap: $11.04B Avg. Daily Volume: 962,614 52-Week Range: $32.67-$42.22
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5. NextEra Energy, Inc. (NYSE:NEE): $113.61

Shares of this electric utility company were sold by 2 insiders:

  • Treasurer Paul I. Cutler sold 19,175 shares for $111.54, generating $2.14 million from the sale. 7,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP & General Counsel Charles E. Sieving sold 8,219 shares for $111.53, generating $916,684 from the sale.

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

P/E: 18.75 Forward P/E: 17.4 Industry P/E: 16.29
P/S: 3 Price/Book: 2.32 EV/EBITDA: 10.38
Market Cap: $52.32B Avg. Daily Volume: 2,586,040 52-Week Range: $93.74-$115.51
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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.