Insider Weekends: Harold Hamm Makes His Largest Purchase Since 2010

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Includes: BSIG, CARG, CLR, GOGO, KMI, MAT, MTD, TWTR, VZ, WMT
by: Asif Suria
Summary

Insider buying increased significantly last week.

Notable Insider Buys: BrightSphere Investment Group plc, Continental Resources, Inc., Kinder Morgan, Inc., Gogo Inc., Mattel, Inc.

Notable Insider Sales: Walmart Inc., Twitter, Inc., Mettler Toledo International Inc., CarGurus, Inc., Verizon Communications Inc.

Insider buying increased significantly last week with insiders purchasing $314.42 million of stock compared to $53.99 million in the week prior. A majority of this increase in insider buying was related to John Paulson acquiring a large stake in BrightSphere as discussed below. Selling also increased with insiders selling $2.09 billion of stock last week compared to $1.86 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 dropped to 6.65. In other words, insiders sold almost 7 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 34.43.

Insider Sector Heat Map March 1, 2019 (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. BrightSphere Investment Group plc (NYSE:BSIG): $14.14

Director John Paulson acquired 14,790,038 shares of this asset management company, paying $13.95 per share for a total amount of $206.32 million. These shares were purchased indirectly by Paulson & Co. Inc.

We normally exclude purchases by funds but decided to make an exception in this case as the purchase was done by Paulson & Co. This purchase appears to be related to the transaction announced last November where Paulson & Co. had indicated that they were going to acquire approximately 24.95% of BrightSphere Investment Group.

P/E: 11.22 Forward P/E: 7.44 Industry P/E: 87.22
P/S: 1.61 Price/Book: 14.46 EV/EBITDA: 9
Market Cap: $1.5B Avg. Daily Volume: 692,423 52 Week Range: $10.04 - $16.34

2. Continental Resources, Inc. (NYSE:CLR): $45.23

CEO & Chairman Harold Hamm acquired 883,977 shares of this oil & gas company, paying $44.49 per share for a total amount of $39.32 million. Mr. Hamm increased his direct stake by 50.74% to 2.63 million shares with this purchase. He also owns an additional 283 million shares indirectly through a family LLC.

Harold Hamm suffered a double whammy over the last few years where declining oil prices significantly decreased the value of his holdings in Continental Resources, a company he founded in 1967 at the age of 21, and an expensive divorce with his wife of 26 years that required him to pay just under $1 billion as detailed in this Forbes article.

As you can see here, he made several insider purchases of CLR over the years, but this is his largest purchase since we started tracking insider data in 2010.

P/E: 17.13 Forward P/E: 14.45 Industry P/E: 14.33
P/S: 3.84 Price/Book: 2.74 EV/EBITDA: 6.34
Market Cap: $16.83B Avg. Daily Volume: 2,707,576 52 Week Range: $35.54 - $71.95

3. Kinder Morgan, Inc. (NYSE:KMI): $19.74

Executive Chairman Richard D. Kinder acquired 900,000 shares of this oil & gas pipelines company, paying $19.28 per share for a total amount of $17.35 million. Mr. Kinder increased his stake by 0.38% to 237,911,657 shares with this purchase.

P/E: 29.68 Forward P/E: 18.11 Industry P/E: 45.32
P/S: 3.16 Price/Book: 1.33 EV/EBITDA: 12.8
Market Cap: $44.68B Avg. Daily Volume: 16,341,513 52 Week Range: $14.62 - $19.74

4. Gogo Inc. (NASDAQ:GOGO): $4.57

Director Charles C. Townsend acquired 400,000 shares of this in-flight broadband provider, paying $4.42 per share for a total amount of $1.77 million. These shares were purchased indirectly through a trust.

P/E: N/A Forward P/E: -3.2 Industry P/E: 15.3
P/S: 0.45 Price/Book: N/A EV/EBITDA: 11.27
Market Cap: $400.15M Avg. Daily Volume: 1,786,542 52 Week Range: $2.64 - $9.878

5. Mattel, Inc. (NASDAQ:MAT): $14.89

Shares of Mattel were acquired by 3 insiders:

  • Chairman & CEO Ynon Kreiz acquired 71,425 shares, paying $14.02 per share for a total amount of $1 million.
  • Director Michael J. Dolan acquired 30,000 shares, paying $13.96 per share for a total amount of $418,800. Mr. Dolan increased his stake by 29.73% to 130,920 shares with this purchase.
  • Chief Financial Officer Joseph J. Euteneuer acquired 20,000 shares, paying $13.95 per share for a total amount of $279,000. Mr. Euteneuer increased his stake by 56.77% to 55,231 shares with this purchase.
P/E: N/A Forward P/E: 59.56 Industry P/E: 25.31
P/S: 1.14 Price/Book: 7.68 EV/EBITDA: 54.82
Market Cap: $5.14B Avg. Daily Volume: 7,234,011 52 Week Range: $9.09 - $17.98

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

Notable Insider Sales:

1. Walmart Inc. (NYSE:WMT): $97.93

Director Robson S. Walton sold 5,540,232 shares of Walmart for $98.90, generating $547.91 million from the sale. These shares were sold indirectly through a trust.

P/E: 43.33 Forward P/E: 19.55 Industry P/E: 36.9
P/S: 0.55 Price/Book: 3.91 EV/EBITDA: 10.45
Market Cap: $284.51B Avg. Daily Volume: 8,593,462 52 Week Range: $81.78 - $106.21

2. Twitter, Inc. (NYSE:TWTR): $30.62

Director Evan Clark Williams sold 682,242 shares of Twitter for $30.83, generating $21.04 million from the sale. These shares were sold indirectly through various trusts.

P/E: 19.63 Forward P/E: 30.02 Industry P/E: 41.41
P/S: 7.7 Price/Book: 3.43 EV/EBITDA: 25.83
Market Cap: $23.41B Avg. Daily Volume: 21,886,395 52 Week Range: $26.19 - $47.79

3. Mettler Toledo International Inc. (NYSE:MTD): $698.76

Shares of this precision instruments manufacturer were sold by 2 insiders:

  • Director Robert F. Spoerry sold 27,112 shares for $679.13, generating $18.41 million from the sale. These shares were sold indirectly by Mr. Spoerry's children.
  • Director Wah-Hui Chu sold 500 shares for $678.00, generating $339,000 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
P/E: 35.15 Forward P/E: 27.62 Industry P/E: 24.94
P/S: 5.9 Price/Book: 29.51 EV/EBITDA: 24.54
Market Cap: $17.33B Avg. Daily Volume: 151,448 52 Week Range: $500.74 - $701.25

4. CarGurus, Inc. (NASDAQ:CARG): $40.37

Shares of this online auto shopping provider were sold by 2 insiders:

  • Director Anastasios Parafestas sold 411,326 shares for $42.35, generating $17.42 million from the sale. These shares were sold indirectly through various trusts.
  • General Counsel and Secretary Kathleen Bender Patton sold 4,856 shares for $42.88, generating $208,222 from the sale.
P/E: 70.82 Forward P/E: 72.09 Industry P/E: 33.91
P/S: 9.79 Price/Book: 22.96 EV/EBITDA: 152.39
Market Cap: $4.44B Avg. Daily Volume: 697,765 52 Week Range: $29.185 - $57.25

5. Verizon Communications Inc. (NYSE:VZ): $56.96

Director Lowell C. McAdam sold 285,988 shares of Verizon for $56.72, generating $16.22 million from the sale.

P/E: 15.15 Forward P/E: 11.92 Industry P/E: 21.33
P/S: 1.8 Price/Book: 4.43 EV/EBITDA: 6.62
Market Cap: $235.36B Avg. Daily Volume: 16,890,249 52 Week Range: $46.09 - $61.58

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

Disclaimer: I hold a long position in Twitter. 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 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.