Analyzing Monday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

We present here noteworthy buys and sells from Monday's (March 12th, 2012) SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. These were selected by a review of over 200 separate SEC Form 4 transactions filed by insiders on Monday. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

Vivus Inc. (NASDAQ:VVUS): VVUS is a biopharmaceutical company developing therapeutic products to address unmet medical needs in obesity, diabetes and sexual health. On Monday, two insiders filed SEC Forms 4 indicating that they exercised options and sold the resulting 139,623 shares for $3.0 million. The two sellers included VP & Chief Accounting Officer Lee Perry selling 87,623 shares, and Director Linda Shortliffe selling the remaining 52,000 shares. In comparison, insiders sold 1.19 million shares in the past year.

VVUS shares have almost doubled since the company announced last month that an FDA advisory panel voted 20 to 2 in favor of recommending Qnexa, the company's treatment for obesity. While the FDA decision is still pending for the scheduled April 17th PDUFA date, approval seems very likely, and many analysts have been making upbeat statements and raising their ratings and/or price targets. Perhaps the most optimistic statements have come from Rodman & Renshaw that upgraded the stock and raised its price target to $39, estimating Qnexa sales in 2010 at $3 billion in the U.S. and $1.8 billion overseas. Besides Rodman, the bevy of analysts joining the party included JPMorgan, JMP Securities, and Cowen, all of whom raised their price targets to the $40-$45 range. Also, besides Qnexa, VVUS also is up for an April 29th PDUFA date for Avanafil, its drug for the treatment of erectile dysfunction.

Ford Motor (NYSE:F): Ford manufactures automobiles under the Ford and Lincoln nameplates, offers a wide range of after-sales vehicle services and products, and also offers vehicle financing, leasing and insurance services. On Monday, EVP Lewis Booth filed SEC Form 4 indicating that he exercised options and sold the resulting 361,059 shares for $4.5 million, ending with 0.60 million shares in direct and 0.06 million in indirect shares after the sale (not including derivative holdings). In comparison, Ford insiders sold a total of 1.22 million shares in the past year.

Ford reported a disappointing Q4 in January, missing analyst earnings estimates (20 cents v/s 26 cents), but beating revenue estimates ($34.6 billion v/s $32.2 billion). Its shares have been flat and in a narrow consolidation pattern since the report, trading at a current 6.4 P/E and 3.2 P/B compared with averages of 11.1 and 4.2 for its peers in the domestic auto group. The group overall is performing well, increasing its U.S. market share, year-over-year, for the first time since 1988, partly on account of the Japanese tsunami, but also on account of the popularity of new domestic fuel-efficient cars such as the Chevy Cruze and the Ford Fiesta.

Kraft Foods Inc. (KFT): KFT is among the largest branded food and beverage companies in the world, offering products such as biscuits, confectionary products, beverages, cheese products, grocery items, and convenient meals. On Monday, EVP Mary Stone West filed SEC Form 4 indicating that she exercised options to acquire 77,570 shares and sold those and an additional 6,649 shares for $3.2 million, ending with 76,089 shares after the sale (not including derivative securities). In comparison, insiders sold 0.17 million shares in the past year. KFT reported an in-line Q4 last month, and its shares trade at a current 16.6 P/E and 1.9 P/B compared to averages of 20.5 and 3.4 for its peers in the diversified foods group.

Southwestern Energy Co. (NYSE:SWN): SWN is engaged in the exploration and production of oil and natural gas primarily in AK, OK, TX and PA. On Monday, two insiders filed SEC Forms 4 indicating that they sold 195,235 shares for $6.6 million. Of these, Director Harold Korell exercised options to acquire 116,285 shares and sold those and an additional 14,950 shares, and Director Robert Howard exercised options and sold the remaining 64,000 shares. In comparison, insiders sold 0.9 million shares in the last year. SWN trades at 17-18 forward P/E compared to the average of 15.6 for its peers in the U.S. oil & gas exploration & production group.

On top of these, some additional large insider sales reported on Monday included:

  • a $2.9 million sale by two insiders at McKesson Corp. (NYSE:MCK), a provider of ethical drugs, health and beauty care products and medical supplies and equipment to pharmacies and hospitals, with 12,500 of the 33,500 shares sold by EVP Jorge Figueredo pursuant to a 10b5-1 plan;
  • a $2.3 million sale by Director Eric Mattson at National Oilwell Varco (NYSE:NOV), engaged in the manufacture and sale of equipment, components and products used in oil and gas drilling and production; and
  • a $1.0 million sale by EVP James Borel at DuPont De Nemours & Co. (NYSE:DD), that manufactures agricultural, food, building, communications, construction, electronics and other products and raw materials.

Furthermore, insiders also reported noteworthy buys on Monday in:

  • Consol Energy Inc. (NYSE:CNX), a producer of bituminous coal and coal-bed methane gas, primarily in the northern and central Appalachian and Illinois basins, in which Director Joseph Williams purchased 1,000 shares for $32,484, the only insider purchase in the past year.

Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and The information and data is believed to be accurate, but no guarantees or representations are made.

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

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