Insider Weekends: Jay Hoag Steps Up His Purchases Of Zillow

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Includes: ADUS, AMH, HAS, INTU, PAH, SFM, TWTR, W, WMT, Z
by: Asif Suria
Summary

Insider buying decreased last week.

Notable insider buys: Z, AMH, SFM, PAH, W.

Notable insider sales: WMT, TWTR, INTU, ADUS, HAS.

Insider buying decreased last week with insiders purchasing $90.28 million of stock compared to $130.03 million in the week prior. Selling, on the other hand, increased with insiders selling $1.46 billion of stock last week compared to $1.14 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 went up to 16.17. In other words, insiders sold more than 16 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week when the ratio stood at 8.78.

Insider Sector Heat Map - Last 30 Days (Source: InsideArbitrage.com database)

Note: As mentioned in the first post in this series, 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. Zillow Group, Inc. (NASDAQ:Z): $36.55

Director Jay C. Hoag acquired 1,049,403 shares of this real estate information provider paying $35.45 per share for a total amount of $37.19 million. These shares were purchased indirectly by TCV Mariner Investor IX, L.P.

Zillow also made it to the top of our list last week and we wrote the following about the company then.

Zillow has had a wild ride in 2018 with the stock trading all the way up to $65.70 by mid-June before losing more than half its value through last week. The selling accelerated last week after the company reported a 21.7% increase in third quarter revenue to $343.09 million, which missed estimates by a sliver and more importantly guided Q4 revenue below expectations. Investors were also unhappy that Zillow has gotten into the business of buying and selling homes, which unlike Redfin's business model, requires Zillow to hold homes in inventory. Some investors referred to this new line of business as a "flipping business" and it comes at a times when the housing market is cooling.

Does this sharp decline in Zillow present a buying opportunity? Jay Hoag and the co-founder of Zillow Rich Barton certainly seem to think so. When Jay Hoag purchases shares of a company, I pay attention, as the timing of his purchases have been spot on in the past.

Last Monday, the stock shot up nearly 12% and continued going up through most of the week before settling a little lower on Friday. Mr. Hoag not only purchased more shares last week but also he did so at higher prices than the week before.

Unlike the prior week, where he only purchased non-voting Class C shares; this time around, he bought both Class A shares and the more liquid Class C shares. Class A shares have voting rights and trade under the symbol ZG.

P/E: N/A Forward P/E: 93.72 Industry P/E: 19.74
P/S: 5.94 Price/Book: 2.24 EV/EBITDA: 58.84
Market Cap: $7.43B Avg. Daily Volume: 3,172,195 52-Week Range: $26.38 - $65.70

2. American Homes 4 Rent (NYSE:AMH): $20.83

Shares of this real estate investment trust were acquired by 2 insiders:

  • Director Tamara Hughes Gustavson acquired 379,400 shares, paying $19.78 per share for a total amount of $7.51 million. Ms. Gustavson increased her stake by 2.16% to 17,983,378 shares with this purchase.
  • Director B. Wayne Hughes acquired 379,400 shares, paying $19.78 per share for a total amount of $7.51 million. These shares were purchased indirectly through a trust.

It feels like déjà vu because we also saw this father-daughter team purchase shares last week. We wrote a more detailed post about American Homes 4 Rent for premium members in September.

P/E: N/A Forward P/E: 94.68 Industry P/E: 35.52
P/S: 7.01 Price/Book: 1.17 EV/EBITDA: 17.63
Market Cap: $7.33B Avg. Daily Volume: 2,302,065 52-Week Range: $18.39 - $23.34

3. Sprouts Farmers Market, Inc. (NASDAQ:SFM): $23.02

Shares of this grocery stores chain were acquired by 3 insiders:

  • Director Shon A. Boney acquired 88,500 shares, paying $22.83 per share for a total amount of $2.02 million. Mr. Boney increased his stake by 1569.71% to 94,138 shares with this purchase.
  • Interim Co-CEO and CFO Bradley Lukow acquired 10,000 shares, paying $23.09 per share for a total amount of $230,864. Mr. Lukow increased his stake by 7.72% to 139,598 shares with this purchase.
  • Chief Merchandising Officer David McGlinchey acquired 5,000 shares, paying $23.10 per share for a total amount of $115,500. Mr. McGlinchey increased his stake by 71.08% to 12,034 shares with this purchase.

There was speculation last year that Albertsons (NYSE:ACI) was in talks with Sprouts Farmers Market (SFM) to acquire the company. With the Rite Aid (NYSE:RAD)/Albertsons merger falling through this year, it is entirely possible that Albertsons or others may consider an acquisition of Sprouts Farmers Market. The company continues to execute well and top-line growth was in double digits territory for six quarters in a row before dipping to 9.9% in Q3 2018.

P/E: 16.35 Forward P/E: 17.05 Industry P/E: 45.35
P/S: 0.58 Price/Book: 4.57 EV/EBITDA: 11.9
Market Cap: $2.94B Avg. Daily Volume: 2,228,953 52-Week Range: $20.63 - $29.67

4. Platform Specialty Products Corporation (NYSE:PAH): $11.77

Shares of this specialty chemicals company were acquired by 2 insiders:

  • Director Martin E. Franklin acquired 126,000 shares, paying $10.98 per share for a total amount of $1.38 million. These shares were purchased indirectly through a trust.
  • Director Ian G. Ashken acquired 28,000 shares, paying $10.98 per share for a total amount of $307,440. These shares were purchased indirectly by IGHA Holdings, LLLP.
P/E: N/A Forward P/E: 15.69 Industry P/E: 24.38
P/S: 0.88 Price/Book: 1.66 EV/EBITDA: 10.16
Market Cap: $3.39B Avg. Daily Volume: 2,581,639 52-Week Range: $9.09 - $13.54

5. Wayfair Inc. (NYSE:W): $106.2

Director Michael Andrew Kumin acquired 18,500 shares of this home furnishing company, paying $89.25 per share for a total amount of $1.65 million. Mr. Kumin increased his stake by 11.63% to 177,605 shares with this purchase.

Mr. Kumin has served on Wayfair's board for over 7 years and is a Managing Partner of the private equity firm Great Hill Partners.

P/E: N/A Forward P/E: -25.35 Industry P/E: 63.7
P/S: 1.55 Price/Book: N/A EV/EBITDA: -23.95
Market Cap: $9.59B Avg. Daily Volume: 2,028,680 52-Week Range: $60.53 - $151.199

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Walmart Inc. (NYSE:WMT): $97.65

Shares of Walmart were sold by 2 insiders:

  • Director Robson S. Walton sold 2,731,356 shares for $95.26, generating $260,178,174 from the sale. These shares were sold indirectly by a trust.
  • Executive Vice President John R. Furner sold 4,000 shares for $97.34, generating $389,360 from the sale.
P/E: 55.77 Forward P/E: 20.73 Industry P/E: 45.35
P/S: 0.56 Price/Book: 3.97 EV/EBITDA: 10.28
Market Cap: $285.99B Avg. Daily Volume: 8,501,103 52-Week Range: $81.78 - $109.98

2. Twitter, Inc. (NYSE:TWTR): $31.45

Director Evan Clark Williams sold 3,759,165 shares of Twitter for $31.61, generating $118.84 million from the sale. These shares were sold indirectly by the Someland Foundation.

P/E: 23.19 Forward P/E: 35.74 Industry P/E: 25.67
P/S: 8.33 Price/Book: 3.69 EV/EBITDA: 30.17
Market Cap: $23.86B Avg. Daily Volume: 26,252,670 52-Week Range: $17.03 - $47.79

3. Intuit Inc. (NASDAQ:INTU): $214.53

Shares of this software application company were sold by 5 insiders:

  • Chairman of Executive Committee Scott D. Cook sold 152,001 shares for $197.41, generating $30 million from the sale.
  • EVP, GM SBSEG Sasan K. Goodarzi sold 85,835 shares for $196.74, generating $16.89 million from the sale.
  • Chairman, CEO, & President Brad D. Smith sold 22,418 shares for $205.63, generating $4.61 million from the sale.
  • EVP, Chief Technology Officer Henry Tayloe Stansbury sold 7,302 shares for $197.82, generating $1.44 million from the sale.
  • EVP, Consumer Group Gregory N. Johnson sold 5,029 shares for $200.91, generating $1.01 million from the sale.
P/E: 45.21 Forward P/E: 29.23 Industry P/E: 34.44
P/S: 9.17 Price/Book: 20.02 EV/EBITDA: 28.72
Market Cap: $55.68B Avg. Daily Volume: 1,770,592 52-Week Range: $150.43 - $231.84

4. Addus HomeCare Corporation (NASDAQ:ADUS): $74.22

Shares of this in-home personal care services provider were sold by 2 insiders:

  • Director Mark L. First sold 540,000 shares for $72.46, generating $39.13 million from the sale.
  • Chief Financial Officer Brian Poff sold 5,000 shares for $73.76, generating $368,800 from the sale.
P/E: 55.22 Forward P/E: 31.32 Industry P/E: 27.71
P/S: 1.92 Price/Book: 3.38 EV/EBITDA: 20.98
Market Cap: $937.37M Avg. Daily Volume: 192,830 52-Week Range: $31.2 - $77.82

5. Hasbro, Inc. (NASDAQ:HAS): $91

Director Alan G. Hassenfeld sold 394,650 shares of this toy company for $97.30, generating $38.4 million from the sale.

P/E: 55.97 Forward P/E: 18.16 Industry P/E: 25.6
P/S: 2.41 Price/Book: 6.11 EV/EBITDA: 16.68
Market Cap: $11.51B Avg. Daily Volume: 1,182,716 52-Week Range: $79 - $109.6

You can view the full list of sales from this Insider Sales page.

Disclaimer: I hold positions in AMH and TWTR. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Disclosure: I am/we are long AMH, TWTR.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.