Insider Weekends - March 25, 2016

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Includes: ADBE, CRM, DWRE, FB, FLKS, NOW, OVAS, ROST, SGEN, SHLD
by: Asif Suria

Summary

Insider buying decreased significantly last week.

Notable insider buys this week: SGEN, OVAS, FLKS, DWRE, SHLD.

Notable insider sales this week: FB, NOW, ADBE, ROST, CRM.

Welcome to edition 301 of Insider Weekends. Insider buying decreased significantly last week with insiders buying $38.86 million of stock compared to $269.24 million in the week prior. Selling also decreased significantly with insiders selling $635.25 million of stock last week compared to $1.33 billion in the week prior.

This muted activity is not unusual as we approach the end of the quarter and most companies enter a quite period when insiders cannot purchase or sell their stock. Insider buying in our previous report was dominated by biotech stocks and this week is no different with biotech stocks accounting for three of the five top purchases. Amongst the insider purchases OvaScience (OVAS) and Flex Pharma (FLKS) stood out because both were purchased by their CEOs indirectly through the venture capital firm Longwood Fund. Both these CEOs are also co-founders and Partners of Longwood Fund.

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 16.35. In other words, insiders sold more than 16 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 4.93. 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 March 25, 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. Seattle Genetics, Inc. (SGEN): $34.68

Director Felix Baker acquired 124,065 shares of this biotech company, paying $31.85 per share for a total amount of $3.95 million. These shares were purchased indirectly by Baker Bros. Advisors LP.

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

P/E: N/A Forward P/E: N/A Industry P/E: 26.85
P/S: 14.37 Price/Book: 7.04 EV/EBITDA: -39.49
Market Cap: $4.85B Avg. Daily Volume: 1,411,960 52 Week Range: $26.02 - $52.33
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2. OvaScience, Inc. (OVAS): $9.06

Chief Executive Officer Michelle Dipp acquired 179,300 shares of this biotech company, paying $9.40 per share for a total amount of $1.68 million. These shares were purchased indirectly by Longwood Fund III LP.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 906.05 Price/Book: 1.98 EV/EBITDA: -1.7
Market Cap: $247.34M Avg. Daily Volume: 519,759 52 Week Range: $4.53 - $48.94
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3. Flex Pharma, Inc. (FLKS): $10.48

President and CEO Christoph H. Westphal acquired 135,195 shares of this biotech company, paying $11.29 per share for a total amount of $1.53 million. These shares were purchased indirectly by Longwood Fund III LP.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: 1.8 EV/EBITDA: -2.37
Market Cap: $188.19M Avg. Daily Volume: 91,075 52 Week Range: $6.48 - $24.82
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4. Demandware, Inc. (DWRE): $35.42

President and CEO Thomas D. Ebling acquired 30,000 shares of this software-as-a-service E-commerce solutions provider, paying $34.93 per share for a total amount of $1.05 million. Mr. Ebling increased his stake by 17.85% to 198,070 shares with this purchase.

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

P/E: N/A Forward P/E: 101.2 Industry P/E: 33.08
P/S: 5.28 Price/Book: 4.36 EV/EBITDA: -60.28
Market Cap: $1.34B Avg. Daily Volume: 658,000 52 Week Range: $26.47 - $75.9
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5. Sears Holdings Corporation (SHLD): $15

Chief Executive Officer Edward S. Lampert acquired 68,271 shares of this department stores chain, paying $14.77 per share for a total amount of $1 million. Mr. Lampert increased his stake by 0.22% to 30,965,732 shares with this purchase.

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

P/E: N/A Forward P/E: N/A Industry P/E: 23.56
P/S: 0.06 Price/Book: N/A EV/EBITDA: -4.18
Market Cap: $1.60B Avg. Daily Volume: 681,362 52 Week Range: $14.56 - $46.23
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You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Facebook, Inc. (FB): $113.05

Shares of Facebook were sold by 2 insiders:

  • Director Jan Koum sold 1,434,530 shares for $111.63, generating $160.14 million from the sale. These shares were sold indirectly through a trust.
  • VP and General Counsel Colin Stretch sold 1,000 shares for $111.34, generating $111,340 from the sale.

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

P/E: 87.43 Forward P/E: 27.37 Industry P/E: 30.97
P/S: 17.87 Price/Book: 7.21 EV/EBITDA: 36.86
Market Cap: $331.61B Avg. Daily Volume: 35,142,300 52 Week Range: $72 - $117.59
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2. ServiceNow, Inc. (NOW): $61.69

Chief Product Officer Frederic B. Luddy sold 195,000 shares of this software-as-a-service providerfor $61.56, generating $12 million from the sale. These shares were sold indirectly through a trust.

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

P/E: N/A Forward P/E: 61.69 Industry P/E: 21.62
P/S: 9.99 Price/Book: 17.66 EV/EBITDA: -90.84
Market Cap: $9.92B Avg. Daily Volume: 2,776,550 52 Week Range: $46 - $91.28
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3. Adobe Systems Incorporated (ADBE): $92.52

Shares of this software company were sold by 10 insiders:

  • Director Charles M. Geschke sold 25,000 shares for $92.47, generating $2.31 million from the sale.
  • EVP, Cust. & Emp. Experience Donna Morris sold 25,000 shares for $93.00, generating $2.33 million from the sale. These shares were sold indirectly through a trust.
  • Director John E. Warnock sold 9,000 shares for $92.70, generating $834,309 from the sale. These shares were sold indirectly through a trust.
  • VP, Corp. Controller & CAO Richard Rowley sold 4,146 shares for $92.46, generating $383,349 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 Adobe Systems Incorporated here.

P/E: 74.61 Forward P/E: 24.41 Industry P/E: 33.08
P/S: 9.58 Price/Book: 6.55 EV/EBITDA: 35.39
Market Cap: $46.37B Avg. Daily Volume: 3,873,690 52 Week Range: $71.27 - $98
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4. Ross Stores Inc. (ROST): $57.41

Shares of this apparel chain were sold by 3 insiders:

  • President, Chief Operating Officer Michael B. O'Sullivan sold 58,163 shares for $58.10, generating $3.38 million from the sale.
  • President, Merchandising Bernard G. Brautigan sold 24,586 shares for $58.35, generating $1.43 million from the sale.
  • Group S.V.P., CFO Michael J. Hartshorn sold 13,831 shares for $59.17, generating $818,415 from the sale.

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

P/E: 23.43 Forward P/E: 18.88 Industry P/E: 18
P/S: 2.01 Price/Book: 9.84 EV/EBITDA: 12.35
Market Cap: $23.76B Avg. Daily Volume: 3,177,510 52 Week Range: $43.47 - $59.68
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5. salesforce.com, inc. (CRM): $72.44

Shares of this software-as-a-service (NASDAQ:SAAS) provider were sold by 5 insiders:

  • Chairman of the Board & CEO Marc Benioff sold 62,500 shares for $72.51, generating $4.53 million from the sale.
  • EVP, General Counsel Amy E. Weaver sold 7,062 shares for $72.87, generating $514,626 from the sale.These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-Founder Parker Harris sold 5,000 shares for $72.87, generating $364,339 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Pres., Sales & Cust. Success Maria Martinez sold 1,574 shares for $72.50, generating $114,115 from the sale.
  • Director John Victor Roos sold 180 shares for $72.16, generating $12,989 from the sale.

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

P/E: N/A Forward P/E: 55.72 Industry P/E: 33.08
P/S: 7.2 Price/Book: 9.6 EV/EBITDA: 81.42
Market Cap: $48.60B Avg. Daily Volume: 6,011,640 52 Week Range: $52.6 - $82.9
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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.

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