Analyzing Thursday And Friday's Noteworthy Insider Trades

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 |  Includes: ABC, ADBE, APU, GLUU, HCN, RTK, SFY, SNTS, SWHC, TIF, VNTV, WMT
by: GuruFundPicks

We present here five noteworthy buys and seven noteworthy sells from Thursday and Friday's (March 22nd and March 23rd, 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 215 and 245 separate SEC Form 4 transactions filed by insiders on Thursday and Friday respectively. 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):

Adobe Systems Inc. (NASDAQ:ADBE): ADBE is a diversified software company operating worldwide, and it offers a line of creative, business, Web and mobile software and services that are used by creative professionals, knowledge workers, developers, marketers, enterprises and consumers. On Thursday, three insiders filed SEC Forms 4 indicating that they sold 193,585 shares for $6.5 million. Of these, the large majority of the shares (120,000) were sold by Co-Chairman of the Board John Warnock, ending with 1.03 million shares after the sale; SVP Karen Cottle exercised options and sold 41,251 shares, pursuant to a 10b5-1 plan; and the remaining 32,334 shares were sold by SVP Matthew Thompson.

ADBE released a mixed Q1 (ending February) on Monday, with earnings in-line (57c), but missing slightly on revenues ($1.04 billion v/s $1.05 billion). Broker reaction to the mixed Q4 results was also mixed, with RBC Capital Markets upgrading the stock and raising its price target to $34 from $32, optimistic based on ADBE's transition to a more subscription model. However, FBR, Macquarie and Pacific Crest were not as positive, with FBR expressing concern over the weakness in its digital media business. ADBE shares currently trade at 12-13 forward P/E and 2.8 P/B compared to averages of 50.8 and 4.7 for its peers in the computer software group, while earnings are projected to rise from $2.35 in 2011 to $2.65 in 2013 at an annual rate of 6.2%,

AmerisourceBergen Corp. (NYSE:ABC): ABC distributes brand name and generic drugs, over-the-counter healthcare products and home healthcare supplies. On Thursday, CEO Steven Collis filed SEC Form 4 indicating that he exercised options and sold the resulting 245,258 shares for $9.5 million, ending the day with 83,783 shares (not including derivative securities). In comparison, insiders sold 0.97 million shares in the past six months. ABC shares have almost tripled from their lows in 2008/09, and currently trade near all-time highs, at a discount 12-13 forward P/E and 3.4 P/B compared to averages of 15.7 and 3.1 for its closest peers in the retail drug store group, while earnings are projected to increase from $2.54 in 2011 to $3.18 in 2013 at an annual rate of 11.7%.

Glu Mobile Inc. (NASDAQ:GLUU): GLUU designs original and third-party licensed mobile games for wireless handsets and social networking websites. On Friday, SVP Kal Iyer filed SEC Form 4 indicating that he exercised options to acquire 200,807 shares and sold those and an additional 4,583 shares for $0.9 million, pursuant to a 10b5-1 plan, ending with no shares after the sale (not including derivative securities). This is in addition to the sale of 100,000 shares reported just last week by CEO Niccolo De Masi. In comparison, corporate insiders sold only an additional 4,632 shares in the past six months.

GLUU shares jumped Friday on an upgrade to Strong Buy by Needham, with an $8 target price, on the strength of its smartphone business. In the latest Q4, GLUU beat analyst earnings estimates (2c loss v/s 10c loss) and missed on revenues ($15.2 million v/s $16.9 million); its shares currently trade at 25-26 forward P/E and 5.8 P/B compared to averages of 14.2 and 2.1 for its peers in toys, games and hobby group.

On top of these, additional large insider sales reported on Thursday and Friday included:

  • an $8.7 million sale by Vice Chairman Wright Castro at Wal-mart Stores (NYSE:WMT), one of the world's largest retailers, and operator of Wal-Mart and Sam's Club stores worldwide under discount, super-center and neighborhood market formats;
  • a $5.0 million sale by three insiders at Tiffany & Co. (NYSE:TIF), engaged in the design, manufacture and retail of fine jewelry worldwide;
  • a $1.3 million sale by Chief Investment & Administrative Officer Gregory Neeb at Sunrise Senior Living (SRZ), a provider of assisted and independent senior living services in 319 communities in the U.S., Canada and U.K.; and
  • a $1.2 million sale by Director Mitchell Saltz at Smith & Wesson Holding Corp. (NASDAQ:SWHC), the world's leading producer of quality handguns, law enforcement products, firearm safety and security products.

Furthermore, insiders also reported noteworthy buys on Thursday and Friday in:

  • AmeriGas Partners LP (NYSE:APU), one of the largest propane distributors in the U.S., in which two insiders purchased 4,775 shares for $192,439, the only insider purchase at APU in the last year;
  • Rentech Inc. (NASDAQ:RTK), engaged in the commercialization of its proprietary Rentech-SilvaGas biomass gasification process that converts multiple biomass feedstocks into synthesis gas (syngas) for the production of renewable fuels and power, in which SVP Jeffrey Spain purchased 29,000 shares for $60,029, a new position for him, and in comparison to 39,000 shares purchased by RTK insiders in the last six months and 145,700 shares purchased in the past two years (insiders at RTK also sold 80,000 shares on Friday, in comparison to 3.9 million shares sold in the past year);
  • Santarus Inc. (NASDAQ:SNTS), a development-stage biotech company focused on acquiring, developing and commercializing proprietary products addressing diabetes, high cholesterol, ulcerative colitis, travelers diarrhea and other diseases, in which Director David Hale purchased 18,000 shares for $96,174 (in addition to exercising options to acquire an additional 89,713 shares), the only insider purchase in the last two years;
  • Swift Energy Co. (NYSE:SFY), an independent oil & gas exploration & production company, focused on U.S. onshore natural gas reserves located in TX and LA, in which Director Charles Swindells purchased 2,000 shares for $59,500, the only insider purchase in the last two years; and
  • Vantiv LLC (NYSE:VNTV), a provider of integrated payment processing services and advanced technology solutions for businesses and financial institutions, in which two insiders purchased 60,100 shares for $1.02 million, with 60,000 of those shares purchased by Director Thomas Ryan.

Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. 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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