Top Insider Purchases – August 11, 2010:
The insider purchases by the management team at MEMC Electronic Materials (WFR) that we discussed over the last couple of days was also highlighted in an article in the Wall Street Journal yesterday titled MEMC Buying Seen as ‘Very Positive Sign’. This did not however prevent MEMC from dropping along with the rest of the market yesterday. The Dow fell over 265 points or 2.49%, while the Russell 2000 index representing the universe of small cap stocks fell nearly 4%. Every single long position in my portfolio was in the red and the only glimpses of green were my short positions in AIMCO (AIV) and the Ultrashort Russell 2000 ETF (TWM).
The volume of insider purchases is usually negatively correlated to market movement and yesterday was no exception with insiders stepping up their purchases. Once again I decided to expand the list to 7 top insider purchases to highlight two additional purchases that looked interesting.
Notable Insider Buys:
1. Boston Private Financial Holdings Inc. (BPFH): $6.41
CEO and President Clayton Deutsch acquired 273,501 shares, paying $6.59 per share for a total amount of $1.8 million. Mr. Deutsch, a senior partner at management consulting firm McKinsey, was appointed CEO of this Boston based bank holding company on June 8, 2010.
| P/E: N/A | Forward P/E: 14.57 | Industry P/E: 15.3 |
| P/S: 1.93 | Price/Book: 0.82 | EV/EBITDA: N/A |
| Market Cap: $440.92M | Avg. Daily Volume: 751,065 | 52 Week Range: $4.31 – $8.97 |
2. CVS Caremark Corporation (CVS): $28.62
Per G.H. Lofberg, President of the Caremark Pharmacy Services division, acquired 11,000 shares, paying $29.86 per share for a total amount of $328,460. CVS has long been on my watch list and the stock has not yet recovered from the drop following its dispute with Walgreen even though the dispute was eventually resolved. The stock dropped some more over the last couple of days and I am considering starting a position in the company.
| P/E: 10.98 | Forward P/E: 9.51 | Industry P/E: 13.49 |
| P/S: 0.4 | Price/Book: 1.08 | EV/EBITDA: 6.63 |
| Market Cap: $38.87B | Avg. Daily Volume: 13,071,700 | 52 Week Range: $27.38 – $38.27 |
3. Dell Inc. (DELL): $12.1
Director James Breyer purchased 20,000 shares, paying an average price of $12.35 per share for a total amount of $246,987.
| P/E: 16.05 | Forward P/E: 8.23 | Industry P/E: 19.58 |
| P/S: 0.43 | Price/Book: 4.02 | EV/EBITDA: 4.72 |
| Market Cap: $23.70B | Avg. Daily Volume: 27,181,000 | 52 Week Range: $11.72 – $17.52 |
4. Tenet Healthcare Corp. (THC): $4.3
Director Ronald Rittenmeyer purchased 50,000 shares of this Texas based hospital operator, paying $4.49 per share for a total amount of $224,644. Mr. Rittenmeyer, who was the former Chairman and CEO of Electronic Data Systems (EDS), joined the Tenet board in late June, 2010.
| P/E: 15.75 | Forward P/E: 12.65 | Industry P/E: 11.78 |
| P/S: 0.23 | Price/Book: 4.76 | EV/EBITDA: 5.52 |
| Market Cap: $2.09B | Avg. Daily Volume: 12,193,800 | 52 Week Range: $4.05 – $6.46 |
5. Calgon Carbon Corporation (CCC): $12.08
Director William Newlin acquired 12,000 shares of this water, air and food purification products company, paying $12.37 per share a total amount of $148,440.
| P/E: 17.18 | Forward P/E: 13.57 | Industry P/E: N/A |
| P/S: 1.52 | Price/Book: 2.15 | EV/EBITDA: 7.47 |
| Market Cap: $674.43M | Avg. Daily Volume: 732,980 | 52 Week Range: $11.94 – $18.35 |
6. Safeway Inc. (SWY): $21.25
Director Michael Shannon probably does not buy into the whole deflation scenario as he purchased 6,200 shares of this grocer, paying $21.75 per share for a total amount of $134,850.
| P/E: N/A | Forward P/E: 11.87 | Industry P/E: 16.73 |
| P/S: 0.2 | Price/Book: 1.63 | EV/EBITDA: 5.19 |
| Market Cap: $8.11B | Avg. Daily Volume: 6,396,910 | 52 Week Range: $18.35 – $27.04 |
7. Winmark Corp. (WINA): $31.11
Chairman and CEO John Morgan purchased 4,100 shares of Winmark (parent of Play It Again Sports), paying $30.31 per share for a total amount of $124,271. Winmark was the only stock in this list that closed in positive territory yesterday.
| P/E: 21.05 | Forward P/E: 18.97 | Industry P/E: 20.81 |
| P/S: 4 | Price/Book: 9.27 | EV/EBITDA: 11.8 |
| Market Cap: $155.89M | Avg. Daily Volume: 10,548 | 52 Week Range: $18.3 – $35.5 |
Voluntary Disclosure: I have a long position in Safeway (SWY).
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