Welcome to edition ninety two of Insider Weekends. Insider buying increased with insiders purchasing $61.15 million of their stock last week compared to $39.1 million in the week prior. Selling on the other hand declined with insiders selling $1.61 billion worth of stock last week compared to $2.07 billion in the week prior.
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 26.35. In other words, insiders sold more than 26 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 52.9. 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.
Note: As mentioned in the first post in this series Introduction to Insider Weekends, 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. GTx, Inc. (GTXI): $3.48
10% owner Jack W. Schuler acquired 866,623 shares of this biotechnology company, paying $3.33 per share for a total amount of $2.89 million. We normally do not include insider purchases by 10% owners but in this case, one of the two Form 4 filings listed Mr. Schuler as a Director of the company and the other one as a 10% owner.
When exploring if he was indeed a director, I noticed that Mr. Schuler has been a long-term shareholder of GTx, was the former president and COO of Abbott Laboratories (ABT) and has been a director of Medtronic (MDT) since 1990. This was a direct open market purchase and not a private placement.
You can view the list of recent insider transactions for GTx, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 17.6|
|P/S: 14.53||Price/Book: 2.98||EV/EBITDA: -4.71|
|Market Cap: $218.55M||Avg. Daily Volume: 620,118||52 Week Range: $2.28 – $6.86|
2. Corning Incorporated (GLW): $13.29
Director Gordon Gund acquired 150,000 shares of this specialty glass and ceramic products manufacturer, paying $12.75 per share for a total amount of $1.91 million. These shares were acquired indirectly through a trust.
It is interesting to see such a large purchase close to a 52 week low. The company has been investing heavily in growth both through a large R&D budget ($671 million representing 8.5% of revenue last year) and through capital investments. With growing revenue and operating margins north of 23%, the company is generating enough operating cash flow to offset those high capital expenditures and add cash to its strong balance sheet. As of December 2011 the company had $3.41 billion in net cash on the balance sheet. The stock sports a 2.3% dividend yield and trades for 6 times EBITDA.
Voluntary Disclosure: I have a long position in Corning.
You can view the list of recent insider transactions for Corning Incorporated here.
|P/E: 7.51||Forward P/E: 8.86||Industry P/E: 14.08|
|P/S: 2.58||Price/Book: 0.96||EV/EBITDA: 6.03|
|Market Cap: $20.18B||Avg. Daily Volume: 19,741,300||52 Week Range: $11.51 – $22.05|
3. Fresh Del Monte Produce, Inc. (FDP): $22.64
Director Amir Abu-Ghazaleh acquired 82,954 shares of this fresh produce producers paying $22.63 per share for a total amount of $1.88 million. Mr. Abu-Ghazaleh increased his stake by 2.37% to 3,582,549 shares with this purchase.
The brother of CEO Mohammad Abu-Ghazaleh, Mr. Amir Abu-Ghazaleh has served as a director of Fresh Del Monte since 1996. As you can see from this page, most of the transactions for Fresh Del Monte are direct or options related sales and several of those sales were by members of the Abu-Ghazaleh family. It is interesting to see one of them finally turn around and buy shares. The stock dropped 11% over the last week after reporting a fourth quarter loss on weakness in Europe and lower prices for bananas. The company has low single digit profit margins typical of this business and trades below book value.
You can view the list of recent insider transactions for Fresh Del Monte Produce, Inc. here.
|P/E: 14.51||Forward P/E: 10.29||Industry P/E: 11.54|
|P/S: 0.36||Price/Book: 0.76||EV/EBITDA: 7.29|
|Market Cap: $1.31B||Avg. Daily Volume: 231,354||52 Week Range: $21.26 – $28.11|
4. Rayonier Inc. (RYN): $45.04
Director David C. Brown acquired 17,000 shares of this real estate and timber company, paying $44.26 per share for a total amount of $752,420. Mr. Brown increased his stake by 111.75% to 32,212 shares with this purchase.
You can view the list of recent insider transactions for Rayonier Inc. here.
|P/E: 20.47||Forward P/E: 18.16||Industry P/E: 14.18|
|P/S: 3.65||Price/Book: 4.11||EV/EBITDA: 12.64|
|Market Cap: $5.49B||Avg. Daily Volume: 873,477||52 Week Range: $34.68 – $47.56|
5. Furiex Pharmaceuticals, Inc. (FURX): $22.48
Director Fredric N. Eshelman acquired 30,474 shares of this drug development collaboration company, paying $20.71 per share for a total amount of $631,117. Mr. Eshelman increased his stake by 1.54% to 2,008,124 shares with this purchase.
You can view the list of recent insider transactions for Furiex Pharmaceuticals, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 20.32|
|P/S: 49.19||Price/Book: 2.97||EV/EBITDA: -3.92|
|Market Cap: $223.65M||Avg. Daily Volume: 59,325||52 Week Range: $12.25 – $23.28|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Sara Lee Corporation (SLE): $21.38
Director Jeffrey W. Ubben sold 20,404,523 shares of this processed & packaged goods company for $20.52, generating $418.7 million from the sale.
These shares were sold indirectly through ValueAct Capital Master Fund. It appears that the fund essentially liquidated its entire position in Sara Lee through an open market sale ahead of the impending split of Sara Lee into two companies, one of which will inherit the meat business and the other will inherit the higher growth coffee business.
Mr. Ubben is a Founder, CEO and the CIO of ValueAct Capital. With offices in San Francisco and Boston, the fund prefers taking concentrated positions in a limited number of companies that are fundamentally undervalued.
You can view the list of recent insider transactions for Sara Lee here.
|P/E: 24.8||Forward P/E: 20.36||Industry P/E: 18.44|
|P/S: 1.43||Price/Book: 6.42||EV/EBITDA: 10.65|
|Market Cap: $12.65B||Avg. Daily Volume: 5,430,690||52 Week Range: $15.66 – $22.04|
2. Public Storage (PSA): $130.72
Director Tamara Hughes Gustavson sold 570,000 shares of this diversified REIT for $130.86, generating $74.59 million from the sale.
You can view the list of recent insider transactions for Public Storage here.
|P/E: 39.68||Forward P/E: 19.11||Industry P/E: 17.11|
|P/S: 12.45||Price/Book: 4.25||EV/EBITDA: 22.1|
|Market Cap: $22.39B||Avg. Daily Volume: 835,516||52 Week Range: $101.77 – $141.48|
3. Cabela’s Inc (CAB): $34.6
Director Michael R. McCarthy sold 619,955 shares of this sporting goods retailer for $34.68, generating $21.5 million from the sale.
You can view the list of recent insider transactions for Cabela’s Inc here.
|P/E: 17.3||Forward P/E: 12.49||Industry P/E: 23.6|
|P/S: 0.84||Price/Book: 2.01||EV/EBITDA: 13.6|
|Market Cap: $2.38B||Avg. Daily Volume: 636,336||52 Week Range: $19.12 – $36.5|
4. Crown Castle International Corp (CCI): $54.43
Shares of this cell phone tower company were sold by 5 insiders:
- Director Landis J. Martin sold 103,000 shares for $52.32, generating $5.39 million from the sale. 2,000 of these shares were sold indirectly from Mr. Martin’s children’s trust.
- EVP & General Counsel Blake E. Hawk sold 100,000 shares for $54.00, generating $5.4 million from the sale.
- Senior VP, CFO & Treasurer Jay A. Brown sold 42,000 shares for $54.28, generating $2.28 million from the sale.
- SVP & Chief Commercial Officer Patrick Slowey sold 37,700 shares for $53.21, generating $2 million from the sale.
- Director Edward C. Hutcheson sold 30,000 shares for $52.42, generating $1.57 million from the sale.
Voluntary Disclosure: I have a hedged short position in Crown Castle International
You can view the list of recent insider transactions for Crown Castle International Corp here.
|P/E: 104.67||Forward P/E: 47.75||Industry P/E: 17.5|
|P/S: 7.43||Price/Book: 6.33||EV/EBITDA: 17.39|
|Market Cap: $15.30B||Avg. Daily Volume: 1,918,800||52 Week Range: $36.38 – $54.53|
5. FARO Technologies, Inc. (FARO): $53.78
Shares of this computerized measurement devices company were sold by 4 insiders:
- Director Simon Raab sold 195,268 shares for $52.77, generating $10.3 million from the sale. 31,945 of these shares were sold indirectly through Xenon Research. Mr. Raab and his wife own all outstanding shares of Xenon Research.
- Chief Financial Officer Keith S. Bair sold 18,128 shares for $54.09, generating $980,474 from the sale. A portion of these shares were sold as a result of exercising options immediately prior to the sale.
- Director Stephen Cole sold 15,000 shares for $55.76, generating $836,380 from the sale.
- Director Marvin R. Sambur sold 5,000 shares for $50.05, generating $250,250 from the sale.
You can view the list of recent insider transactions for FARO Technologies, Inc. here.
|P/E: 38.69||Forward P/E: 19.63||Industry P/E: 16.53|
|P/S: 3.49||Price/Book: 3.57||EV/EBITDA: 19.53|
|Market Cap: $902.00M||Avg. Daily Volume: 125,580||52 Week Range: $29.45 – $59.66|
You can view the full list of sales from this Insider Sales page.
Disclosure: See author's portfolio holdings here.