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Insider Weekends – February 4, 2011

 February 07, 2011 01:30 PM
 


Welcome to edition thirty five of Insider Weekends. Insider buying dropped sharply last week with insiders purchasing $17.19 million of their stock when compared to $36.95 million in the week prior. Selling more than tripled with insiders selling $1.07 billion worth of stock when compared to $340.66 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 buying in that week. The adjusted ratio for last week increased significantly to 62.5. In other words, insiders sold more than 62 times as much stock as they purchased. This is the highest the ratio has been since the first week of December. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 9.22. 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 -Sobering Quarter and Guidance for Long-Time Apple Bull]

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 -5 Dividend Stocks With Fresh Billion Share Buyback Programs]

Insider Sell Buy Ratio February 4, 2011

Notable Insider Buys:

1. RLI Corp. (RLI): $55.37

Shares of this property & casualty insurance company were acquired by 3 insiders:

  • Director Gerald D. Stephens acquired 71,200 shares, paying $53.92 per share for a total amount of $3.84 million.
  • Director Robert O. Viets acquired 109 shares, paying $54.26 per share for a total amount of $5,914.

RLI made our list for the second week in a row.

P/E: 9.23Forward P/E: 13.95Industry P/E: 12.06
P/S: 1.99Price/Book: 1.47EV/EBITDA: 6.76
Market Cap: $1.16BAvg. Daily Volume: 169,76952 Week Range: $49.69 – $61.97

2. Cirrus Logic Inc. (CRUS): $24.81

Director Robert Henry Smith acquired 142,000 shares of this specialized semiconductor company, paying $21.06 per share for a total amount of $2,990,378.

While not exactly cheap, this high growth company has operating margins of 22% and Return on Equity (ROE) of 38%. More than half of the company's revenue comes from Apple as its products are used in iPads and iPhones. Revenue grew 47% in the most recent quarter and the company is planning on expanding its workforce by more than 25% by adding 150 employees. Cirrus was picked as one of the best companies to work for in Texas in 2009 and 2010, so it looks like those new employees might find a happy home.

The stock is already up 10.27% since this filing came out on Wednesday.

P/E: 18.65Forward P/E: 16.22Industry P/E: 18.24
P/S: 4.69Price/Book: 5.35EV/EBITDA: 17.04
Market Cap: $1.68BAvg. Daily Volume: 3,627,86052 Week Range: $6.23 – $25.05

3. Sharps Compliance Corp. (SMED): $4.5

Shares of this Texas based medical waste disposal company were acquired by 6 insiders:

  • Director Ramsay H. Gillman acquired 100,000 shares, paying $4.14 per share for a total amount of $414,278. Mr. Gillman increased his stake by 10.99% to 1,009,796 shares with this purchase.
  • Director John W. Dalton acquired 50,000 shares, paying $3.87 per share for a total amount of $193,283. Mr. Dalton increased his stake by 5.04% to 1,042,342 shares with this purchase.
  • CEO and President David P. Tusa acquired 10,300 shares, paying $3.96 per share for a total amount of $40,836. Mr. Tusa increased his stake by 19.62% to 62,800 shares with this purchase.
  • Sr. VP of Sales & Marketing Claude A. Dance acquired 5,000 shares, paying $3.87 per share for a total amount of $19,350.
  • Vice President & CFO Diana P. Diaz acquired 2,500 shares, paying $3.91 per share for a total amount of $9,775.
  • Chief Operating Officer Ramsey Hashem acquired 2,000 shares, paying $3.89 per share for a total amount of $7,780.
P/E: N/AForward P/E: 450Industry P/E: 18.61
P/S: 3.94Price/Book: 2.59EV/EBITDA: -11.28
Market Cap: $67.14MAvg. Daily Volume: 96,10852 Week Range: $3.65 – $8.09

4. General Electric Co. (GE): $20.56

Director Alan G. Lafley acquired 25,000 shares of GE, paying $20.17 per share for a total amount of $504,250. Mr. Lafley increased his stake by 81.39% to 55,716 shares with this purchase.

P/E: 19.43Forward P/E: 12.69Industry P/E: 17.22
P/S: 1.47Price/Book: 1.86EV/EBITDA: 21.39
Market Cap: $218.68BAvg. Daily Volume: 60,018,60052 Week Range: $13.75 – $20.96

5. Caterpillar Inc. (CAT): $99.59

Shares of this construction equipment company were acquired by 2 insiders:

  • Director Jesse J. Greene Jr. acquired 2,000 shares, paying $99.23 per share for a total amount of $198,464.
  • Director Miles D. White acquired 1,000 shares, paying $98.67 per share for a total amount of $98,675.
P/E: 24Forward P/E: 12.69Industry P/E: 13.82
P/S: 1.48Price/Book: 5.82EV/EBITDA: 14.32
Market Cap: $63.44BAvg. Daily Volume: 5,851,01052 Week Range: $50.5 – $99.72

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $27.77

Shares of Microsoft were sold by 3 insiders:

  • Founder and Director Bill Gates sold 5,000,000 shares for $27.99, generating $139.96 million from the sale.
  • Chief Research Strategy Officer Craig J. Mundie sold 496,074 shares for $26.60, generating $13.2 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Senior Vice President Lisa E. Brummel sold 40,661 shares for $27.97, generating $1.14 million from the sale.
P/E: 11.85Forward P/E: 10.06Industry P/E: 29.85
P/S: 3.48Price/Book: 4.79EV/EBITDA: 6.91
Market Cap: $233.33BAvg. Daily Volume: 58,420,80052 Week Range: $22.73 – $31.58

2. GameStop Corp. (GME): $20.05

Director Leonard Riggio sold 3,008,497 shares of this video game retailer for $19.85, generating $59.73 million from the sale.

P/E: 8.19Forward P/E: 6.89Industry P/E: 8.47
P/S: 0.32Price/Book: 1.07EV/EBITDA: 3.79
Market Cap: $3.04BAvg. Daily Volume: 3,863,34052 Week Range: $17.12 – $25.75

3. Perrigo Co. (PRGO): $71.67

Shares of this drug and nutritional products manufacturer were sold by 3 insiders:

  • Director Michael J. Jandernoa sold 305,000 shares for $72.20, generating $22.02 million from the sale. These shares were sold indirectly through a trust.
  • EVP Global Operations & Supply John T. Hendrickson sold 53,564 shares for $73.08, generating $3.91 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive VP, General Counsel Todd W. Kingma sold 15,366 shares for $72.77, generating $1.12 million from the sale. 600 shares were sold indirectly by Mr. Kingma's daughters. The rest were sold as a result of exercising options immediately prior to the sale.
P/E: 27.21Forward P/E: 16.25Industry P/E: 15.47
P/S: 2.77Price/Book: 5.49EV/EBITDA: 15.65
Market Cap: $6.61BAvg. Daily Volume: 827,18052 Week Range: $44.7 – $74.46

4. Cypress Semiconductor Corporation (CY): $23.33

Shares of this semiconductor company were sold by 5 insiders:

  • President & CEO Thurman J. Rodgers sold 705,000 shares for $22.04, generating $15.54 million from the sale. According to the filing this "represents the sale of shares acquired on exercise of expiring option grant to fund the exercise price and tax cost." Mr. Rodgers exercised options for 1,236,066 shares.
  • CFO Brad W. Buss sold 150,000 shares for $22.16, generating $3.32 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Executive Vice President Norman P. Taffe sold 140,553 shares for $21.16, generating $2.97 million from the sale. 112,892 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Director Daniel McCranie sold 51,279 shares for $21.33, generating $1.1 million from the sale. 21,279 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Director Evert van de Ven sold 20,000 shares for $22.26, generating $445,152 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
P/E: 59.67Forward P/E: 16.78Industry P/E: 16.63
P/S: 4.39Price/Book: 5.51EV/EBITDA: 21.94
Market Cap: $3.97BAvg. Daily Volume: 3,453,38052 Week Range: $9.73 – $23.57

5. Under Armour, Inc. (UA): $63.7

The little company that has managed to fill Nike's big shoes was on sale last week; by its insiders. Shares of this sports apparel company were sold by 4 insiders:

  • President and CEO Kevin A. Plank sold 143,100 shares for $59.97, generating $8.58 million from the sale.
  • EVP of Business Development Scott J. Plank sold 46,875 shares for $59.97, generating $2.81 million from the sale.
  • COO Wayne Marino sold 28,786 shares for $59.81, generating $1.72 million from the sale.
  • Director William R. McDermott sold 15,285 shares for $59.78, generating $913,737 from the sale.
P/E: 47.54Forward P/E: 31.23Industry P/E: 15.93
P/S: 2.89Price/Book: 6.19EV/EBITDA: 19.81
Market Cap: $3.25BAvg. Daily Volume: 744,75252 Week Range: $23.72 – $64.95

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

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