Analyzing Tuesday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Tuesday December the 27th, they bought and sold stock in over 210 separate transactions in 130 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime late last week. We culled through these 210 or so insider buys and sells (based on SEC Forms 3, 4, and 5 filings), as part of our daily and weekly coverage of insider trades, and present here the most notable trades reported Tuesday (for a general discussion on how to interpret insider trades, please look at the end of this article):

Energy Transfer Equity LP (ETE): ETE owns a diversified portfolio of energy assets, including natural gas gathering and transportation pipelines, natural gas treating and processing assets, and three natural gas storage facilities. Insiders currently hold 45.2 million shares or 20.3% of outstanding shares. On Tuesday, Enterprise Products Partners (NYSE:EPD) filed SEC Form 4 indicating that pursuant to a privately negotiated agreement executed on December 23rd and scheduled to close in January 2012, the company had agreed to sell 22.8 million shares for $825.1 million, reducing its position in the company to 6.5 million shares. Also, on Tuesday, CEO Kelcy Warren filed SEC Form 4 indicating that he purchased 1.0 million shares for Kelcy Warren Partners LP, a limited partnership owned by Mr. Warren, increasing his holdings to 38.8 million shares in indirect holdings and an additional 6.0 million shares in direct holdings.

EPD is a leading integrated provider of processing and transportation services to producers of natural gas liquids (NGSs) and consumers of NGL products. In its press release, it indicated that proceeds from the sale will be used by EPD for general partnership purposes, including funding capital growth projects. ETE is up slightly around 5% YTD, and trades at 19-20 forward P/E compared to the 19.9 average for its peers in the oil and gas production and pipeline group.

Curis Inc. (CRIS): CRIS is a development stage biotech company focused on the development of targeted cancer therapies that modulate signaling pathways controlling the repair and regeneration of tissues. Insiders currently hold 10.4 million or 13.7% of outstanding shares. On Tuesday, Director Susan Bayh filed SEC Form 4 indicating that she exercised options and sold the resulting 29,705 shares for $0.13 million, pursuant to a 10b5-1 plan. Insider selling is uncommon at CRIS and the last time they sold was in March this year, and overall insiders sold a total of 211,987 shares in the past year. CRIS shares are up strongly this year, up over 230% YTD, on the basis of positive results from pivotal trials of its partner Genentech's Vismodegib treatment for advanced basal cell carcinoma that is currently under FDA review with a PDUFA date in March 2012. Genentech is a member of the Roche Group (OTCQX:RHHBY), and last week it filed a Marketing Authorization Application (MAA) for Vismodegib to the EMA.

Carnival Corp. (CCL): CCL operates as a cruise and vacations company providing cruises to various vacation destinations with a total of 98 ships under ten brands servicing North America, Asia, Australia and Europe. Insiders currently hold 112.0 million or 14.3% of outstanding shares. On Tuesday, two insiders sold a total of 132,723 shares for $4.4 million. The majority of the shares were sold by COO Howard Frank (124,603 shares), ending with 149,762 shares in direct and 9,499 shares in indirect holdings, and the remaining 8,120 shares were sold by CEO Raymond Cahill. CCL is down 28% YTD and trades at 10-11 forward P/E and 1.1 P/B compared to averages of 24.6 and 3.7 for its peers in the leisure and recreation services group.

Chimera Investment Corp. (CIM): CIM is a REIT investing in residential mortgage loans, mortgage-backed securities and real-estate related securities. Insiders currently hold 2.0 million or 0.2% of outstanding shares. On Tuesday, three insiders filed SEC Forms 4 indicating that together they added 157,848 shares for $0.6 million. The largest amount of shares were bought by Director Gerard Creagh (119,252 shares), increasing his holdings to 193,134 shares, and the remaining shares were bought by Director Patrick Reilly (19,070 shares) and Director Paul Keenan (19,526 shares). Overall, during the past three months, insiders bought only an additional 20,000 shares. CIM has been weak throughout the year, down 36% YTD, and it trades at its lows and at 5-6 forward P/E and 0.8 P/B compared to averages of 8.4 and 0.8 for its peers in the Mortgage Trust REIT group.

Verizon Communications (VZ): VZ is a diversified communications service provider formed by the merger of Bell Atlantic and GTE. It provides local exchange, network access, data, wireless and information services in the U.S. and over 150 countries. Insiders currently hold 0.7 million or 0.03% of outstanding shares. On Tuesday, EVP of Public Affairs, Policy and Communications Thomas Tauke exercised options and sold the resulting 63,077 shares for $2.5 million, ending with 6,894 shares (and 201,883 derivative securities). Insider selling is uncommon at VZ, and overall during the past year, insiders sold only an additional 14,388 shares. VZ shares have been strong this year, up 12% YTD and trading at almost four-year highs, and at 15-16 forward P/E and 2.9 P/B compared to averages of 19.1 and 1.7 for its peers in the diversified communications services group.

Netapp Inc. (NTAP): NTAP manufactures integrated network storage and data management hardware for corporations and government agencies. Insiders currently hold 1.3 million or 0.4% of outstanding shares. On Tuesday, Director Daniel Warmenhoven filed SEC Form 4 indicating that he exercised options and sold the resulting 123,153 shares for $4.4 million from his trust over which he has indirect control, ending with 2.3 million shares in indirect and 51,314 shares in direct holdings. Overall, insiders sold only an additional 3,958 shares during the last three months, and they sold a total of 858,768 shares in the past year. NTAP shares have been weak this year, down 34% YTD, and it trades at 13-14 forward P/E and 3.4 P/B compared to averages of 74.3 and 2.9 for its peers in the computer storages devices group.

On top of these, some additional large trades included a $2.7 million sale by Chief Yahoo David Filo at internet search, content, advertising and shopping services company Yahoo! Inc. (YHOO); a $3.0 million sale (after exercising options) by CFO Donald Blair at athletic footwear, apparel, equipment and accessories company Nike Inc. (NKE); and a $1.5 million sale (after exercising options) by CEO JW Marriott Jr. in hotel chain Marriott Intl Inc. (MAR).

Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, 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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