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Insider Weekends – December 03, 2010

 December 05, 2010 11:02 PM
 


Welcome to edition twenty six of Insider Weekends. Insider buying increased last week with insiders purchasing $12.9 million of their stock when compared to $9.17 million in the week prior. Selling decreased with insiders selling $1.27 billion worth of stock when compared to $1.38 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 buying in that week. The adjusted ratio for last week went down to 98.13. In other words, insiders sold more than 98 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 150.77. 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.

[Related -Fusion-IO, Inc. (FIO): Can Fusion-IO Q2 Results Cheer Street?]

Insider Sell Buy Ratio December 3, 2010

Note: As mentioned in the first post in this series Introduction to Insider Weekends, 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.

[Related -Riverbed Technology, Inc. (RVBD): Turning Down $19 – A Smart Move?]

Notable Insider Buys:

1. BlackRock, Inc. (BLK): $172.35

Director James Grosfeld acquired 25,000 shares of this publicly owned investment manager, paying $165.04 per share for a total amount of $4.13 million. Mr Grosfeld increased his stake by 19.64% to 152,274 shares with this purchase.

Mr. Grosfeld also picked up 41,000 shares in July and another 25,000 in mid-November. We last mentioned BlackRock in the November 19 Insider Weekends post where I wrote, "BlackRock is one of the largest investment management companies in the world with $3.45 trillion in assets under management as of September 2010. The company also owns the iShares brand of ETFs that it acquired from Barclays (BCS) in mid-2009."

P/E: 19.29Forward P/E: 15.03Industry P/E: 17.9
P/S: 4.27Price/Book: 1.29EV/EBITDA: 11.52
Market Cap: $32.79BAvg. Daily Volume: 1,192,07052 Week Range: $138.42 – $243.8

2. American Apparel, Inc. (APP): $1.6

Chairman & CEO Dov Charney acquired 1,129,576 shares of this apparel retailer, paying $1.48 per share for a total amount of $1.67 million. Mr Charney increased his stake by 2.83% to 41,009,689 shares with this purchase.

Famous for its Made in USA clothes produced in Los Angeles, the company has run into a series of problems recently. The company had come under scrutiny last year after the government found that about a third of the retailer's employees were illegal immigrants. Moreover the company has indicated that come January it may not be in compliance with a debt covenant required by its UK based lender Lion Capital. Lion has already loosened debt covenants for American Apparel in the past and it remains to be seen if it does so again.

Besides the all important December quarter the company has been posting losses in the other three quarters and barely eked out a full year profit in 2009. In light of these developments this purchase by the CEO is perplexing. However investors bid the stock up more than 10% on Friday following this purchase.

P/E: N/AForward P/E: N/AIndustry P/E: 13.76
P/S: 0.19Price/Book: 1.13EV/EBITDA: 31.67
Market Cap: $114.32MAvg. Daily Volume: 546,50052 Week Range: $0.66 – $3.88

3. Western Alliance Bancorporation (WAL): $6.5

Director Todd Marshall acquired 84,000 shares of this multi bank holding company, paying $6.13 per share for a total amount of $514,520.

20,000 shares were acquired indirectly through The J&A Educational Family LP, 14,000 shares were acquired indirectly through The Todd Marshall Revocable Trust and 50,000 shares were acquired indirectly through The Arthur Marshall Family 1993 Irrevocable Trust.

P/E: N/AForward P/E: 27.08Industry P/E: 19.45
P/S: 3.9Price/Book: 1.07EV/EBITDA: N/A
Market Cap: $529.85MAvg. Daily Volume: 394,79452 Week Range: $3.45 – $9.64

4. First Industrial Realty Trust Inc. (FR): $8.01

Director Patrick Hackett acquired 63,000 shares of this real estate investment trust (REIT), paying $7.61 per share for a total amount of $479,665.

There appears to be an error in the filing and the column that reports the amount of shares held by the insider following the transaction is incorrect. Hence we did not calculate how much Mr. Hackett's stake increased following this filing.

As the name indicates, this Chicago based REIT operates in the industrial real estate space. The CEO purchased shares on Oct 29 but the Chief Investment Officer sold a small amount (700 shares) on November 29.

P/E: N/AForward P/E: 9.54Industry P/E: 61.9
P/S: 1.41Price/Book: 0.61EV/EBITDA: 15.67
Market Cap: $510.81MAvg. Daily Volume: 1,062,75052 Week Range: $3.69 – $9.33

5. Schawk Inc. (SGK): $18.48

Chairman Clarence Schawk acquired 19,999 shares of this marketing services provider, paying $18.22 per share for a total amount of $364,371. Ms. Schawk increased her stake by 0.89% to 2,255,061 shares with this purchase.

It has been interesting to see the CEO David Schawk sell stock indirectly from a trust even as the Chairman Clarence Schawk purchases shares over the last couple of weeks. Trading at less than 10 times 2009 free cash flow, the numbers on this company look attractive. However revenue has been declining over the last three years and there are no signs of growth yet.

P/E: 15.89Forward P/E: 11.41Industry P/E: 27.73
P/S: 1.02Price/Book: 1.83EV/EBITDA: 6.92
Market Cap: $474.36MAvg. Daily Volume: 70,22352 Week Range: $11 – $21.24

Notable Insider Sales:

1. Wynn Resorts Ltd. (WYNN): $103.34

Shares of this resorts & casinos operator were sold by three insiders:

  • Chief Executive Officer Stephen Wynn sold 100,000 shares for $103.30 per share, generating a total amount of $103.3 million
  • Director Elaine Wynn sold 100,000 shares for $103.30 per share, generating a total amount of $103.3 million
  • President, Wynn International Marketing Linda Chen sold 30,000 shares for $104.67 per share, generating a total amount of $3.14 million
P/E: 313.15Forward P/E: 44.74Industry P/E: 14.89
P/S: 3.41Price/Book: 4.17EV/EBITDA: 15.91
Market Cap: $12.81BAvg. Daily Volume: 3,077,95052 Week Range: $58.21 – $117.5

2. Tutor Perini Corporation (TPC): $19.85

Chairman & amp; CEO Ronald Tutor sold 4.5 million shares of this construction services company for $19.50 per share, generating a total amount of $87.75 million.

P/E: 8.31Forward P/E: 8.38Industry P/E: 19.68
P/S: 0.26Price/Book: 0.7EV/EBITDA: 3.84
Market Cap: $934.72MAvg. Daily Volume: 382,13952 Week Range: $15.56 – $25.48

3. Oracle Corp. (ORCL): $28.81

Chief Executive Officer Lawrence Joseph Ellison sold 100,000 shares of this application software company for $27.48 per share, generating a total amount of $27.48 million.

P/E: 22.99Forward P/E: 13.1Industry P/E: 25.1
P/S: 4.83Price/Book: 4.4EV/EBITDA: 11.43
Market Cap: $144.83BAvg. Daily Volume: 38,715,20052 Week Range: $21.24 – $29.82

4. Riverbed Technology, Inc. (RVBD): $34.82

Shares of this networking & communication solutions provider were sold by three insiders:

  • Director James Swartz sold 384,357 shares for $34.39 per share, generating a total amount of $13.22 million
  • Chairman & CEO Jerry Kennelly sold 200,000 shares for $34.29 per share, generating a total amount of $6.86 million
  • Chief Financial Officer Randy Gottfried sold 20,000 shares for $34.35 per share, generating a total amount of $686,906. This sale was as a result of exercising options immediately prior to the sale.
P/E: 235.27Forward P/E: 45.82Industry P/E: 30.31
P/S: 10.14Price/Book: 10.73EV/EBITDA: 78.53
Market Cap: $5.12BAvg. Daily Volume: 4,942,85052 Week Range: $9.81 – $35.32

5. OpenTable, Inc. (OPEN): $72.28

Shares of this restaurant reservation solutions provider were sold by five insiders:

  • Sr. V.P. Engineering Charles Norman McCullough sold 143,700 shares for $71.06 per share, generating a total amount of $10.2 million
  • Director Thomas Layton sold 75,000 shares for $73.55 per share, generating a total amount of $5.52 million
  • Director William Gurley sold 58,350 shares for $71.18 per share, generating a total amount of $4.15 million
  • Senior Vice President, Sales Michael Dodson sold 30,200 shares for $72.77 per share, generating a total amount of $2.2 million. 24,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Financial Officer Matthew Roberts sold 6,550 shares for $72.94 per share, generating a total amount of $477,764. This sale was as a result of exercising options immediately prior to the sale.
P/E: 142.85Forward P/E: 68.84Industry P/E: 19.58
P/S: 19.29Price/Book: 17.57EV/EBITDA: 71.84
Market Cap: $1.66BAvg. Daily Volume: 737,55052 Week Range: $24.2 – $76.69
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