Insider Weekends: May 6, 2016

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May 8, 2016 | Insider Buying | | Author Asif

Welcome to edition 307 of Insider Weekends. Insider buying decreased last week with insiders buying $43.91 million of stock compared to $120.89 million in the week prior. Selling more than doubled with insiders selling $2.43 billion of stock last week compared to $596.16 million 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 55.46. In other words, insiders sold more than 55 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 4.93. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio May 6, 2016

Insider Sell Buy Ratio May 6, 2016

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. Cimpress N.V. (CMPR): $90.96

Director Scott J. Vassalluzzo acquired 67,500 shares of this business services company (operator of Vistaprint), paying $89.05 per share for a total amount of $6.01 million. Mr. Vassalluzzo increased his stake by 5,003.71% to 68,849 shares with this purchase.

You can view the list of recent insider transactions for Cimpress N.V. here.

P/E: 41.8 Forward P/E: 18.99 Industry P/E: 19.85
P/S: 1.76 Price/Book: 17.81 EV/EBITDA: 16.59
Market Cap: $2.86B Avg. Daily Volume: 245,238 52 Week Range: $63.15 – $99.95

2. Bank of the Ozarks, Inc. (OZRK): $37.23

Shares of this regional bank were acquired by 2 insiders:

  • Director Ross M. Whipple acquired 120,000 shares, paying $37.78 per share for a total amount of $4.53 million. 100,000 of these shares were purchased indirectly by LLLP.
  • Director Nicholas A. Brown acquired 2,900 shares, paying $36.86 per share for a total amount of $106,887. Mr. Brown increased his stake by 55.89% to 8,089 shares with this purchase.

You can view the list of recent insider transactions for Bank of the Ozarks, Inc. here.

P/E: 17.81 Forward P/E: 11.86 Industry P/E: 16.09
P/S: 7.21 Price/Book: 2.29 EV/EBITDA: N/A
Market Cap: $3.38B Avg. Daily Volume: 1,533,540 52 Week Range: $33.66 – $54.96

3. Seagate Technology Public Limited Company (STX): $19.07

Chairman and CEO Stephen J. Luczo acquired 200,000 shares of this data storage company, paying $20.08 per share for a total amount of $4.02 million. These shares were purchased indirectly through a trust.

This large insider purchase by the CEO did little to inspire investor confidence as the stock dropped another 9.5% last week (adjusted for the juicy 63 cents per share dividend paid on May 6th) following a big plunge in April. The stock has lost nearly half its value since the start of this year, plunging beyond competitor Western Digital’s (WDC) 38% drop as you can see from the chart below.

Seagate Western Digital YTD Performance

Seagate Western Digital YTD Performance (click to enlarge)

Western Digital is in the midst of a large merger with SanDisk (SNDK) as it attempts to diversify away from hard disk drives. Concerns about a big shift from hard drives to solid state storage or flash drives has plagued both Seagate and Western Digital for over a decade and both stocks appear to be perpetually cheap. Those concerns remained unfounded for a long time because of the huge cost difference between hard disk drives and solid state drives (SSD). Investors in both Western Digital and Seagate did well through the end of 2014. Things have started changing recently as SSD adoption has grown (I am typing this on a computer with a SSD) and costs have come down for SSDs without reaching full parity with hard drives.

As a little experiment I decided to configure some high end servers on Dell, checked out dedicated server hosting through Rackspace (RAX) and looked at data storage product offerings from EMC. The Dell severs continue to offer hard drives along with hybrid systems that employ both hard drives and SSDs. The Rackspace servers I checked out offered hard drives as well while EMC prominently featured SSD based storage systems.

Given the small sample size and quick checks, this can be considered as no more than anecdotal evidence but it was interesting to see that enterprise systems continue to use both hard drives and SSDs. Whether Seagate and Western Digital manage to make this transition from hard drives to SSDs remains to be seen and that is why the stocks continue to remain cheap.

You can view the list of recent insider transactions for Seagate Technology Public Limited Company here.

P/E: 9.61 Forward P/E: 9.78 Industry P/E: N/A
P/S: 0.49 Price/Book: 3.26 EV/EBITDA: 4.75
Market Cap: $5.69B Avg. Daily Volume: 7,063,260 52 Week Range: $18.81 – $57.88

4. NuStar Energy L.P. (NS): $47.07

Director William E. Greehey acquired 50,000 shares of this oil & gas pipeline company, paying $49.21 per share for a total amount of $2.46 million. Mr. Greehey increased his stake by 1.70% to 2,989,990 shares with this purchase.

You can view the list of recent insider transactions for NuStar Energy L.P. here.

P/E: 14.25 Forward P/E: 19.29 Industry P/E: 22.34
P/S: 1.83 Price/Book: 2.42 EV/EBITDA: 11.17
Market Cap: $3.67B Avg. Daily Volume: 530,254 52 Week Range: $25.65 – $65.52

5. NuStar GP Holdings, LLC (NSH): $24.26

Director William E. Greehey acquired 84,243 shares of this oil & gas pipeline company, paying $25.19 per share for a total amount of $2.12 million. These shares were purchased indirectly.

You can view the list of recent insider transactions for NuStar GP Holdings, LLC here.

P/E: 14.41 Forward P/E: 14.79 Industry P/E: 22.34
P/S: 13.45 Price/Book: 3.61 EV/EBITDA: N/A
Market Cap: $1.04B Avg. Daily Volume: 150,721 52 Week Range: $12.86 – $39.94

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

Notable Insider Sales:

1. Amazon.com, Inc. (AMZN): $673.95

Shares of Amazon were sold by 2 insiders:

  • Chairman, CEO and President Jeffrey P. Bezos sold 1,000,000 shares for $671.29, generating $671.29 million from the sale.
  • Senior Vice President David Zapolsky sold 1,110 shares for $677.36, generating $751,870 from the sale.

You can view the list of recent insider transactions for Amazon.com, Inc. here.

P/E: 539.16 Forward P/E: 69.27 Industry P/E: 52.55
P/S: 2.9 Price/Book: 23.19 EV/EBITDA: 39.99
Market Cap: $317.99B Avg. Daily Volume: 4,496,860 52 Week Range: $418.36 – $696.44

2. Facebook, Inc. (FB): $119.49

Shares of Facebook were sold by 4 insiders:

  • Director Jan Koum sold 2,295,248 shares for $118.02, generating $270.89 million from the sale. These shares were sold indirectly through a trust.
  • Director Peter Thiel sold 857,626 shares for $117.84, generating $101.06 million from the sale. These shares were sold indirectly by Rivendell One LLC.
  • Chief Technology Officer Michael Todd Schroepfer sold 20,000 shares for $117.82, generating $2.36 million from the sale.
  • Chief Financial Officer David M. Wehner sold 7,973 shares for $119.90, generating $955,963 from the sale.

You can view the list of recent insider transactions for Facebook, Inc. here.

P/E: 92.41 Forward P/E: 26.09 Industry P/E: 31.71
P/S: 18.7 Price/Book: 7.55 EV/EBITDA: 39.08
Market Cap: $341.78B Avg. Daily Volume: 31,467,900 52 Week Range: $72 – $120.79

3. Microsoft Corporation (MSFT): $50.39

Shares of Microsoft were sold by 2 insiders:

  • Founder Bill Gates sold 5,300,000 shares for $50.04, generating $265.22 million from the sale.
  • EVP, Human Resources Kathleen T. Hogan sold 17,500 shares for $50.04, generating $875,768 from the sale.

You can view the list of recent insider transactions for Microsoft Corporation here.

P/E: 35.66 Forward P/E: 17.38 Industry P/E: 26.93
P/S: 4.48 Price/Book: 5.15 EV/EBITDA: 11.2
Market Cap: $396.09B Avg. Daily Volume: 32,091,600 52 Week Range: $39.72 – $56.85

4. Cliffs Natural Resources Inc. (CLF): $3.51

Director Douglas C. Taylor sold 7,231,520 shares of this coal and iron ore mining company for $3.81, generating $27.56 million from the sale.

You can view the list of recent insider transactions for Cliffs Natural Resources Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 12.5
P/S: 0.28 Price/Book: N/A EV/EBITDA: 10.23
Market Cap: $638.55M Avg. Daily Volume: 8,688,030 52 Week Range: $1.2 – $6.39

5. The Estée Lauder Companies Inc. (EL): $93.99

Group President John Demsey sold 138,839 shares of this personal products company for $92.40, generating $12.83 million from the sale. 76,296 of these shares were sold as a result of exercising options immediately prior to the sale.

You can view the list of recent insider transactions for The Estée Lauder Companies Inc. here.

P/E: 30.32 Forward P/E: 26.25 Industry P/E: 25.13
P/S: 3.11 Price/Book: 9.56 EV/EBITDA: 16.54
Market Cap: $34.64B Avg. Daily Volume: 1,410,380 52 Week Range: $73.67 – $97.48

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

Disclaimer Clients of Signal Partners, LLC  and I may have positions in any of these stocks at any time. 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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria




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