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Insider Weekends – February 10, 2012

 February 13, 2012 12:51 AM
 


Welcome to edition eighty eight of Insider Weekends. Insider buying increased with insiders purchasing $63.5 million of their stock last week compared to $35.1 million in the week prior. Selling decreased with insiders selling $939.76 million worth of stock last week compared to $1.2 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 decreased to 14.81. In other words, insiders sold nearly 15 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 35.1.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 -Why dividend-paying utilities stocks could lag again in 2014]

Insider Sell Buy Ratio February 10, 2012

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.

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Notable Insider Buys:

1. Urstadt Biddle Properties Inc. (UBP): $19.26

Shares of this commercial REIT were acquired by 2 insiders:

  • Chairman of the Board and CEO Charles J. Urstadt acquired 100,000 shares, paying $20 per share for a total amount of $2 million. These shares were acquired indirectly through Urstadt Property Company, Inc of which Mr. Urstadt is Chairman and a controlling shareholder.
  • President and COO Willing L. Biddle acquired 100,000 shares, paying $20 per share for a total amount of $2 million.

Given that the number of shares and purchase price were the same for both purchases, I checked the historical prices and volume for this REIT and this was indeed an open market purchase. Both Mr. Urstadt and Mr. Biddle have frequently purchased shares over the last year as you can see from this page but this is their largest purchase. The stock sports a yield of 4.6%, which is higher than the 3.84% average yield of industrial/office REITs.

The stock isn't particularly cheap and the only reason I can ascertain for these purchases is improving business conditions. The company stated as much while reporting its fiscal fourth quarter and full year results when it said, "At October 31, 2011, our core portfolio was 90.5% leased and we have considerable new leasing activity across the portfolio. In addition, we have a good pipeline of acquisitions and hope to continue to inc rease our asset base into fiscal 2012 and beyond.". The company also raised its dividend for the 18th straight year.

You can view the list of recent insider transactions for Urstadt Biddle Properties Inc. here.

P/E: 29.77Forward P/E: N/AIndustry P/E: N/A
P/S: 5.96Price/Book: 2.26EV/EBITDA: 12.88
Market Cap: $536.06MAvg. Daily Volume: 12,74452 Week Range: $12.6 – $20.05

2. Halliburton Company (HAL): $36.06

Director Murry Gerber acquired 30,000 shares of this oil & gas services provider, paying $36.84 per share for a total amount of $1.1 million. Mr. Gerber increased his stake by 1,500% to 32,000 shares with this purchase.

Mr. Gerber was named to Halliburton's board last month and will be confirmed during the annual meeting in May 2012. Since new directors generally tend to buy shares, I would not read much into this purchase.

You can view the list of recent insider transactions for Halliburton Company Common Stoc here.

P/E: 11.71Forward P/E: 7.91Industry P/E: 16.18
P/S: 1.36Price/Book: 2.57EV/EBITDA: 5.76
Market Cap: $33.21BAvg. Daily Volume: 17,735,90052 Week Range: $27.21 – $57.77

3. ShoreTel, Inc. (SHOR): $5.74

Shares of this phone equipment and services provider were acquired by 2 insiders:

  • Director Gary James Daichendt acquired 91,900 shares, paying $5.47 per share for a total amount of $503,061. Mr. Daichendt increased his stake by 47.03% to 287,327 shares with this purchase.
  • CEO Peter Blackmore acquired 17,200 shares, paying $5.82 per share for a total amount of $100,161. Mr. Blackmore increased his stake by 62.33% to 44,795 shares with this purchase.

The company has seen rapid revenue growth but remains unprofitable. ShoreTel did manage to generate $3.6 million in free cash flow when it reported fiscal Q1 results ended September 30, 2011.

Voluntary Disclosure: I have a long position in ShoreTel.

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

P/E: N/AForward P/E: 23.92Industry P/E: 13.86
P/S: 1.26Price/Book: 2.25EV/EBITDA: -33.71
Market Cap: $275.20MAvg. Daily Volume: 311,19852 Week Range: $4.57 – $12

4. Meru Networks, Inc. (MERU): $3.65

Shares of this wireless networking company were acquired by 3 insiders:

  • Director Barry A. Newman acquired 100,000 shares, paying $3.68 per share for a total amount of $368,204. Mr. Newman increased his stake by 918.61% to 110,886 shares with this purchase.
  • Director Harold D. Copperman acquired 27,000 shares, paying $3.76 per share for a total amount of $101,634. Mr. Copperman increased his stake by 48.40% to 82,782 shares with this purchase.
  • SVP of WW Sales, SRVC & SUPT Larry Vaughan acquired 4,000 shares, paying $3.66 per share for a total amount of $14,640. Mr. Vaughan increased his stake by 286.74% to 5,395 shares with this purchase.

The stock of Meru Networks has been absolutely annihilated over the last year, dropping over 80% from $18.50 to current levels. Revenue growth has been slow and the company has continued to report a string of losses quarter after quarter thanks to growing SG&A (Selling, General & Administrative) expenses. The company has $40.26 million or $2.29/share in net cash and short-term investments on its balance sheet.

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

P/E: N/AForward P/E: N/AIndustry P/E: 13.52
P/S: 0.71Price/Book: 1.98EV/EBITDA: -1.77
Market Cap: $64.30MAvg. Daily Volume: 172,19052 Week Range: $3.16 – $27.33

5. Dominion Resources, Inc. (D): $49.91

Director Mark J. Kington acquired 5,000 shares of this electric utility, paying $50.33 per share for a total amount of $251,630. Mr. Kington increased his stake by 14.03% to 40,649 shares with this purchase.

You can view the list of recent insider transactions for Dominion Resources, Inc. Common here.

P/E: 19.12Forward P/E: 14.47Industry P/E: N/A
P/S: 1.9Price/Book: 2.44EV/EBITDA: 9.53
Market Cap: $28.43BAvg. Daily Volume: 2,720,87052 Week Range: $42.91 – $53.68

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

Notable Insider Sales:

1. Medivation, Inc. (MDVN): $67.935

Shares of this biotech company were sold by 3 insiders:

  • Chief Business Officer and CFO Clarence Patrick Machado sold 100,000 shares for $70.18, generating $7 million from the sale. 35,584 of theseshares were sold as a result of exercising options immediately prior to the sale.
  • President and CEO David Hung sold 100,000 shares for $70.19, generating $7 million from the sale.
  • Director Kim D. Blickenstaff sold 20,000 shares for $70.86, generating $1,417,127 from the sale. 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 Medivation, Inc. here.

P/E: N/AForward P/E: N/AIndustry P/E: 16.4
P/S: 38.64Price/Book: N/AEV/EBITDA: -72.5
Market Cap: $2.37BAvg. Daily Volume: 691,95852 Week Range: $14.32 – $76.65

2. J.B. Hunt Transport Services (JBHT): $52.31

Shares of this trucking company were sold by 4 insiders:

  • Director Earl Wayne Garrison sold 200,000 shares for $51.85, generating $10.4 million from the sale.
  • President and CEO John N. Roberts sold 30,000 shares for $51.59, generating $1.5 million from the sale.
  • Secretary David G. Mee sold 10,448 shares for $51.12, generating $534,066 from the sale.
  • Chairman of the Board James K. Thompson sold 10,000 shares for $52.19, generating $521,900 from the sale.

You can view the list of recent insider transactions for J.B. Hunt Transport Services, I here.

P/E: 24.79Forward P/E: 17.91Industry P/E: 20.27
P/S: 1.36Price/Book: 10.85EV/EBITDA: 10.47
Market Cap: $6.12BAvg. Daily Volume: 931,58952 Week Range: $34.42 – $53.02

3. Viacom Inc. (VIAB): $49.22

Shares of this entertainment company were sold by four insiders:

  • SEVP, COO Thomas E. Dooley sold 203,046 shares for $49.4, generating $10 million from the sale. 131,526 of these shares were sold indirectly through a GRAT.
  • EVP, Government Relations DeDe Lea sold 13,580 shares for $49.26, generating $668,975 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, General Counsel and Secretary Michael D. Fricklas sold 8,000 shares for $48.86, generating $390,880 from the sale.
  • Director Alan C. Greenberg sold 2,114 shares for $47.64, generating $147,098 from the sale. 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 Viacom Inc. here.

P/E: 16.48Forward P/E: 9.79Industry P/E: N/A
P/S: 1.78Price/Book: 3.35EV/EBITDA: 8.13
Market Cap: $26.61BAvg. Daily Volume: 4,270,63052 Week Range: $35.13 – $52.67

4. Bankrate, Inc. (RATE): $24.31

Shares of this internet-based consumer banking and personal finance network were sold by 4 insiders:

  • SVP-Chief Financial Officer Edward J. DiMaria sold 125,000 shares for $23.40, generating $2.9 million from the sale.
  • SVP – Business Development & Consumer Marketing Michael Ricciardelli sold 120,000 shares for $23.49, generating $2.8 million from the sale.
  • SVP – Chief Revenue Officer Donaldson M. Ross sold 100,000 shares for $23.40, generating $2.3 million from the sale.
  • SVP-Chief Technology Officer Daniel P. Hoogterp sold 70,000 shares for $23.40, generating $1.6 million from the sale.

Bankrate went public last June at $15/share and has seen its stock climb steadily since. It looks like executives are selling now that their lock-up period has expired.

You can view the list of recent insider transactions for Bankrate, Inc. Common Stock here.

P/E: N/AForward P/E: 22.51Industry P/E: 27.8
P/S: 5.68Price/Book: 3.06EV/EBITDA: 19.78
Market Cap: $2.43BAvg. Daily Volume: 531,24552 Week Range: $13.38 – $25.65

5. BE Aerospace, Inc. (BEAV): $45.78

Shares of this aircraft products company were sold by 6 insiders:

  • Chairman & CEO Amin J. Khoury sold 98,965 shares for $44.71, generating $4.4 million from the sale.
  • Sr. VP & CFO Thomas P. McCaffrey sold 49,020 shares for $44.71, generating $2.2 million from the sale.
  • VP,General Counsel & Secretary Ryan M. Patch sold 18,189 shares for $44.86, generating $815,910 from the sale.
  • Vice President & GM Wayne Exton sold 16,472 shares for $44.71, generating $736,463 from the sale.
  • Director Richard Hamermesh sold 2,500 shares for $44.81, generating $112,025 from the sale.
  • Vice President & GM Richard M. Sharpe sold 1,200 shares for $44.00, generating $52,800 from the sale.

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

P/E: 20.44Forward P/E: 13.5Industry P/E: 16.32
P/S: 1.87Price/Book: 2.5EV/EBITDA: 11.68
Market Cap: $4.64BAvg. Daily Volume: 828,00352 Week Range: $28.83 – $46.42

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

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