Insider Weekends: June 17, 2016

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Includes: BCO, CNXR, DEI, FB, JMP, JUNO, LE, SHLD, SHOS, VRX, WDAY, WMS, ZAYO
by: Asif Suria

Summary

Insider buying declined last week.

Notable insider buys this week: VRX, BCO, WMS, JMP and CNXR.

Notable insider sales this week: FB, WDAY, ZAYO, JUNO and DEI.

Welcome to edition 313 of Insider Weekends. Insider buying declined last week with insiders buying $81.74 million of stock compared to $136.88 million in the week prior. Selling also decreased with insiders selling $1.15 billion of stock last week compared to $1.28 billion in the week prior.

One of the insider purchases that has not been making our list for the last two weeks because it is a purchase by a 10% owner was the purchase of Land's End (NASDAQ:LE) by Eddie Lampert. For those of you who have been following the train wreck called Sears Holdings (NASDAQ:SHLD), you would recollect that Land's End was one of several companies spun out of Sears over the last few years. If you haven't followed the Sears saga, Business Insider covers it in great detail in an article published last week called Sears' obsession with Wall Street is killing the retailer for good.

Some deep value investors including Bruce Berkowitz of Fairholme Capital Management believe there is a lot of value in Sears as you can see from Fairholme's purchases of Sears but the vast majority of investors have lost confidence in Mr. Lampert's ability to turn around the company. It is interesting that Mr. Lampert continues to buy shares of both Land's End and Sears Hometown & Outlet Stores (NASDAQ:SHOS) after their spin-offs from Sears. It is possible that Mr. Berkowitz is doing the same but doesn't have to report those additional purchases because Fairholme is not a 10% owner in those companies. The possibility that this trio of companies represent bargains with tremendous potential certainly exists but thus far it has been challenging for investors who are not as close to the companies as Mr. Lampert to see that potential.

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 14.06. In other words, insiders sold more than 14 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 9.35. 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 June 17, 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. Valeant Pharmaceuticals International, Inc. (NYSE:VRX): $22.04

Chairman & CEO Joseph C. Papa acquired 202,000 shares of this Canadian pharmaceutical company, paying $24.48 per share for a total amount of $4.94 million. Mr. Papa increased his stake by 9.02% to 2,442,199 shares with this purchase.

Speaking of train wrecks, there hasn't been a greater one on Wall Street this year than Valeant, which has seen its stock drop nearly 80% since the start of the year and wiping out $27 billion in shareholder value in the process. With its business model in jeopardy and a leveraged balance sheet lumbering under $30.67 billion on net debt, this is an incredibly complex situation. Whether this purchase by the new CEO is because he sees values in the company or because he is signaling the market remains to be seen.

You can view the list of recent insider transactions for Valeant Pharmaceuticals International, Inc. here.

P/E: N/A Forward P/E: 2.79 Industry P/E: N/A
P/S: 0.72 Price/Book: 1.36 EV/EBITDA: 7.73
Market Cap: $7.56B Avg. Daily Volume: 35,197,200 52 Week Range: $21.95 - $263.81
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2. The Brink's Company (NYSE:BCO): $29

Shares of this security & protection services provider were acquired by 2 insiders:

  • President and CEO Douglas A. Pertz acquired 83,696 shares, paying $29.87 per share for a total amount of $2.5 million. Mr. Pertz increased his stake by 5072.48% to 85,346 shares with this purchase. These shares were purchased through a private, negotiated transaction between the Issuer and the reporting person.
  • Director George I. Stoeckert acquired 7,300 shares, paying $29.19 per share for a total amount of $213,107.

You can view the list of recent insider transactions for The Brink's Company here.

P/E: N/A Forward P/E: 13.43 Industry P/E: 26.69
P/S: 0.48 Price/Book: 4.28 EV/EBITDA: 7.73
Market Cap: $1.43B Avg. Daily Volume: 279,483 52 Week Range: $25.8 - $35.35
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3. Advanced Drainage Systems, Inc. (NYSE:WMS): $26.26

Chairman, President & CEO Joseph A. Chlapaty acquired 100,500 shares of this thermoplastic corrugated pipes company, paying $26.51 per share for a total amount of $2.66 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Advanced Drainage Systems, Inc. here.

P/E: 87.53 Forward P/E: N/A Industry P/E: 15.13
P/S: 1.11 Price/Book: 6.76 EV/EBITDA: 11.91
Market Cap: $1.43B Avg. Daily Volume: 478,452 52 Week Range: $17.72 - $33.18
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4. JMP Group LLC (NYSE:JMP): $5.56

CEO Joseph A. Jolson acquired 489,221 shares of this financial services firm, paying $5.33 per share for a total amount of $2.61 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for JMP Group LLC here.

P/E: 34.53 Forward P/E: 8.69 Industry P/E: 21.75
P/S: 0.85 Price/Book: 0.97 EV/EBITDA: N/A
Market Cap: $117.50M Avg. Daily Volume: 45,445 52 Week Range: $4.95 - $8.18
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5. Connecture, Inc. (NASDAQ:CNXR): $2.43

Shares of this health insurance distributor were acquired by 7 insiders:

  • Director Ezra Perlman acquired 1,550,286 shares, paying $1.27 per share for a total amount of $1.98 million. These shares were purchased indirectly by Francisco Partners.
  • Chief Executive Officer Jeff Surges acquired 75,000 shares, paying $1.69 per share for a total amount of $126,456. Mr. Surges increased his stake by 12.93% to 655,000 shares with this purchase.
  • Director David A. Jones acquired 57,696 shares, paying $1.64 per share for a total amount of $94,452. These shares were purchased indirectly through a trust.
  • Director A. John Ansay acquired 25,000 shares, paying $1.58 per share for a total amount of $39,500. Mr. Ansay increased his stake by 175.44% to 39,250 shares with this purchase.
  • Director Vickie L. Capps acquired 15,000 shares, paying $1.61 per share for a total amount of $24,150. Ms. Capps increased his stake by 105.26% to 29,250 shares with this purchase.
  • CFO & Secretary James P. Purko acquired 7,500 shares, paying $1.78 per share for a total amount of $13,350. Mr. Purko increased his stake by 60.00% to 20,000 shares with this purchase.
  • Executive VP, Strategy & Corporate Development David A. Sockel acquired 4,635 shares, paying $1.54 per share for a total amount of $7,138. Mr. Sockel increased his stake by 45.79% to 14,758 shares with this purchase.

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

P/E: N/A Forward P/E: 15.19 Industry P/E: N/A
P/S: 0.56 Price/Book: N/A EV/EBITDA: 29.72
Market Cap: $53.93M Avg. Daily Volume: 181,011 52 Week Range: $1.15 - $11.99
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You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Facebook, Inc. (NASDAQ:FB): $113.02

Shares of Facebook were sold by 4 insiders:

  • Director Jan Koum sold 1,701,902 shares for $114.48, generating $194.83 million from the sale. These shares were sold indirectly through a trust.
  • VP Marketing & Business Partnerships David B. Fischer sold 23,625 shares for $114.59, generating $2.71 million from the sale.
  • Chief Technology Officer Michael Todd Schroepfer sold 20,000 shares for $114.07, generating $2.28 million from the sale.
  • Chief Product Officer Christopher K. Cox sold 15,600 shares for $115.00, generating $1.79 million from the sale.

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

P/E: 69.13 Forward P/E: 24.52 Industry P/E: 28.41
P/S: 16.55 Price/Book: 6.91 EV/EBITDA: 32.08
Market Cap: $323.27B Avg. Daily Volume: 25,776,700 52 Week Range: $72 - $121.08
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2. Workday, Inc. (NYSE:WDAY): $78.6

Shares of this application software company were sold by 5 insiders:

  • Chairman David A. Duffield sold 346,500 shares for $79.87, generating $27.68 million from the sale. These shares were sold indirectly by the Dave & Cheryl Duffield Foundation.
  • Co-President Philip W. Wilmington sold 36,818 shares for $79.85, generating $2.94 million from the sale.
  • Co-President Mark S. Peek sold 17,158 shares for $80.71, generating $1.38 million from the sale.
  • Director George J. Still Jr. sold 10,000 shares for $79.06, generating $790,572 from the sale. These shares were sold indirectly through a trust.
  • Director Michael M. McNamara sold 3,400 shares for $80.39, generating $273,326 from the sale. These shares were sold indirectly through Flextronics International USA, Inc. 2005 Senior Executive Deferred Compensation Plan.

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

P/E: N/A Forward P/E: 262 Industry P/E: 44.97
P/S: 12.43 Price/Book: 13.85 EV/EBITDA: -71.59
Market Cap: $15.48B Avg. Daily Volume: 1,670,840 52 Week Range: $47.32 - $85.67
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3. Zayo Group Holdings, Inc. (NYSE:ZAYO): $26.97

Shares of this bandwidth infrastructure solutions provider were sold by 2 insiders:

  • President & COO Christopher Morley sold 200,000 shares for $27.30, generating $5.46 million from the sale. 382 of these shares were sold indirectly by Mango Holdings LLC.
  • Director Richard W. Connor sold 15,000 shares for $27.05, generating $405,750 from the sale.

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

P/E: N/A Forward P/E: 122.59 Industry P/E: N/A
P/S: 4.16 Price/Book: 5.35 EV/EBITDA: 14.43
Market Cap: $6.53B Avg. Daily Volume: 1,475,940 52 Week Range: $19.59 - $29.62
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4. Juno Therapeutics Inc. (NASDAQ:JUNO): $42.4

Shares of this biotech company were sold by 2 insiders:

  • CEO & President Hans Edgar Bishop sold 90,750 shares for $46.42, generating $4.21 million from the sale. 54,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • CFO & Head, Corp. Development Steve Harr sold 30,000 shares for $43.32, generating $1.29 million from the sale.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 155.2 Price/Book: 3.58 EV/EBITDA: -13.92
Market Cap: $4.47B Avg. Daily Volume: 1,061,730 52 Week Range: $22.37 - $59.6
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5. Douglas Emmett Inc (NYSE:DEI): $34

Chairman of the Board Dan A. Emmett sold 140,000 shares of this apartment REIT for $33.85, generating $4.74 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 93.66 Forward P/E: 18.09 Industry P/E: 19.3
P/S: 7.63 Price/Book: 2.64 EV/EBITDA: 23.86
Market Cap: $5.03B Avg. Daily Volume: 1,038,070 52 Week Range: $24.73 - $34.7
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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.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.