Analyzing Monday's Noteworthy Insider Buys And Sells

by: GuruFundPicks

Insiders reported that on Monday, January 9, they bought and sold stock in just under 180 separate transactions in over 90 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime after mid-week last week. We culled through these 180 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 Monday; notable based on the dollar amount sold, the number of insiders selling, based on whether the shares sold represent a significant portion of that insider's holding in the company, or based on whether the overall selling represents a strong pick-up based on historical selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

Vical Inc. (NASDAQ:VICL): VICL develops DNA-based vaccines and therapeutics to prevent and treat cancer and cardiovascular and infectious diseases. Insiders currently hold 9.3 million or 12.9% of outstanding shares. On Monday, 10% owner James Singer filed SEC Form 4 indicating that he purchased 2.67 million shares for $10.0 million in the name of CDEF LLC, a Maine LLC over which he has indirect control, thereby boosting his VICL holdings to 10.0 million shares. Singer is the sole member of CDEF LLC, and his 10.0 million shares holding of VICL shares ranks him just ahead of the largest institutional holders, Federated Investors (9.4 million shares) and Fidelity Investments (7.5 million shares). His CDEF LLC company has been accumulating shares recently, as it reported holding 3.7 million shares in a prior SC 13G/A filing with the SEC in February of last year, and then just last Friday he filed another SC 13G indicating that he purchased 72,000 shares. VICL shares have been among the best performers in the biotech group last year, up over 120% in 2011, buoyed on positive developments in its pipeline, particularly on its lead product Allovectin being tested in phase 3 trials for metastatic melanoma. Last Friday, shares took a dive, falling 8.5%, after the company announced a $50M follow-on offering.

Seagate Technology (NASDAQ:STX): STX manufactures hard-disk drives for the enterprise, desktop, mobile computing, and consumer electronics markets. Insiders currently hold 27.9 million shares or 6.2% of outstanding shares, and on Monday two corporate insiders filed SEC Forms 4 indicating that they exercised options and sold the resulting total of 150,000 shares for $2.7 million, both under 10b5-1 plans. The sellers included CEO Stephen Luczo (100,000 shares) and CTO Robert Whitmore (50,000 shares). Overall, insiders have sold a total of 1.35 million shares since the beginning of November, including the 0.94 million shares that we reported earlier on November 14, in our daily and weekly review of insider and institutional transactions. The strong acceleration in insider selling in the last two months is telling given that STX shares have been on a tear recently, doubling in the last three months, and may portend that management does not have much confidence that the recent run-up in the stock is sustainable.

First Niagara Financial Group (NASDAQ:FNFG): FNFG is a holding company for first Niagara Bank that provides retail and commercial banking, and other financial services to individual, families and businesses via over 250 offices across upstate NY, and PA. Insiders currently hold 3.7 million or 1.3% of outstanding shares. On Monday, three insiders filed SEC Forms 4 indicating that they purchased a total of 5,262 shares. This included Directors Barabara Jeremiah, Thomas Baker, and George Philip. These purchases are on top of the purchase we reported earlier, on December 15, by eight insiders of a total of 21,000 shares. In comparison, insiders bought only a total of 69,562 shares in the past year (selling 17,000).

FNFG trades at a discount 9 current P/E on a TTM basis, and at 0.6 P/B, compared with averages of 13.7 and 0.7 respectively for its peers in the savings & loan group. The stock is down 36% in the past year, and trades near almost 10-year lows. About half of the fall has been precipitated after the company's announcement on August 1st of a definitive agreement to acquire 195 Upstate New York, and Connecticut, branches and $15.0 billion of deposits from HSBC Bank USA, a subsidiary of U.K. based global provider of commercial and investment banking services HSBC Holdings Plc (HBC). The decline has been precipitated based on investor concerns that the transactions would not be immediately accretive, and also to account for the recent $450 million offering of its common stock that added 17% to its outstanding shares.

Biogen Idec Inc. (NASDAQ:BIIB): BIIB is engaged in the research, development and commercialization of therapies for the treatment of multiple sclerosis (MS), cancer and auto-inflammatory diseases. Insiders hold 1.9 million or 0.8% of outstanding shares. On Monday, two insiders filed SEC Forms 4 indicating that they exercised options and sold the resulting total of 15,992 shares for $1.9 million, both under 10b5-1 plans. This included Directors Nancy Leaming and Eric Rowinsky. These purchases are on top of the sale by insiders that we reported earlier, last Thursday, of 24,244 shares for $2.7 million. BIIB is a strong performer, having more than doubled in the last five years, and its shares trade at a discount 18 forward P/E and 4.4 P/B compared with averages of 40.5 and 11.3 for its large-cap growth peers in the biotech group.

Rackspace Hosting Inc. (NYSE:RAX): RAX is a world leader and specialist in hosting and cloud computing, offering computing-as-a-service, including various types of managed hosting services, to SMEs as well as large enterprises worldwide. Insiders hold 14.1 million or 11% of outstanding shares. On Monday, President of Cloud Services Lew Moorman filed SEC Form 4 indicating that he sold a total of 74,750 shares for $3.1 milion, all under 10b5-1 plans, and ended with 0.38 million shares in direct and another 0.38 million shares in indirect holdings. Overall, insiders sold a total of 0.54 million shares (buying none) in the past three months. RAX has been among the best performers in the technology sector, rising over ten-fold from its lows in 2008-09, and it currently trades near its all-time highs at 52-53 forward P/E and 9.9 P/B compared with averages of 122.5 and 3.8 for its peers in the internet services group.

On top of these, some additional large insider trades on Monday included a $1.1 million sale (pursuant to a 10b5-1 plan) by Group Chief Executive of Technology Kevin Campbell at management consulting, technology and outsourcing services provider Accenture plc (NYSE:ACN); a $1.1 million sale, after exercising options and pursuant to a 10b5-1 plan, by Director Uwe Reinhardt at managed healthcare provider Amerigroup Corp. (AGP); a $2.0 million sale, after exercising options and pursuant to a 10b5-1 plan, by two insiders (EVP's Kevin Pearson and Stephen Braunscheidel) at northeast regional bank M&T Bank Corp. (NYSE:MTB); and a $2.5 million sale, after exercising options and pursuant to a 10b5-1 plan, by CEO Michael Mussallem at cardiovascular products company Edwards Lifesciences Corp. (NYSE:EW).

Credit: Fundamental data in this article 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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