Insider Weekends - July 30, 2010

Welcome to the eighth edition of Insider Weekends. Insider buying rebounded last week with insiders purchasing $13.42 million of their stock last week when compared to just $3.4 million in the week prior. Selling picked up pace with insiders selling $498.22 million worth of stock. 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 dropped to 37.11. In other words, insiders sold almost 37 times as much stock as they purchased. A large part of this was once again driven by sales of AutoZone by famous hedge fund manager Edward (Eddie) Lampert and his fund ESL Partners. While we normally exclude fund sales, Mr. Lampert also happens to be a 10% owner and sold more than a third of these shares directly. Removing the AutoZone sales drops the ratio to 32.97. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 98.64 (51.13 without the AutoZone sales). 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. How Fresh is This Data? I received a question from a subscriber last week who wanted to know more about the freshness of the data we are presenting in these blog entries. Insider transaction filings usually come in until almost 10 PM EST every weekday. We collect this data all week long until 10 PM EST on Friday night. I then identify the notable buys and sells on Friday night and pass these on to Ann, who in turn collects the key statistics and other information on Saturday. I calculate the Sell/Buy ratio on Saturday, complete the blog entry and we publish on Sunday. So the data you receive on Sunday is fresh off the presses. In comparison, the weekly insider transactions list published by Barron’s magazine is only looking at data as of Wednesday of the previous week and the key insider transactions published by Value Line (VALU) every Monday are almost two weeks old. Notable Insider Buys: 1. BlackRock, Inc. BLK: $157.49 Director James Grosfeld acquired 41,000 shares of this publicly owned Investment Manager firm, paying $152.37 per share for a total amount of $6.25 million. P/E: 19.01 Forward P/E: 14.62 Industry P/E: 17.52 P/S: 4.5 Price/Book: 1.23 EV/EBITDA: 12.33 Market Cap: $30.06B Avg. Daily Volume: 524,223 52 Week Range: $138.42 – $243.80 2. Eagle Bancorp, Inc. EGBN: $11.56 President and CEO Ronald Paul acquired 80,000 shares, paying $11.23 per share for a total amount of $898,200. Director Neal Gross acquired 15,000 shares of this regional bank paying $11.11 per share for a total amount of $166,700. The troubled asset ratio (TAR) of EGBN has fallen in recent quarters to 12 when compared to the national median of 15 (as of March 2010). EGBN had $1.8 billion in assets as of March 2010. P/E: 19.76 Forward P/E: 13.6 Industry P/E: 15.75 P/S: 3.3 Price/Book: 1.24 EV/EBITDA: N/A Market Cap: $227.18M Avg. Daily Volume: 69,252 52 Week Range: $7.7 – $14.49 3. Cymer Inc. CYMI: $33.28 Director Eric M Ruttenberg acquired 17,000 shares of this semiconductor equipment manufacturer, paying $33.59 per share for a total amount of $571,030. Mr. Ruttenberg is co-managing member of New York based fund Tinicum Capital Partners. P/E: 16.72 Forward P/E: 10.27 Industry P/E: 22.29 P/S: 2.31 Price/Book: 1.77 EV/EBITDA: 7.73 Market Cap: $988.92M Avg. Daily Volume: 362,556 52 Week Range: $28.31 – $40.06 4. Century Bancorp Inc. CNBKA: $21.48 Director Marshall Sloane acquired 25,761 shares of this regional bank, paying $21.5 per share for a total amount of $553,862. This Massachusetts based bank has a TAR of 8.1 and had $2.35 billion in assets as of March 2010. It is interesting to see that this bank is trading below book value. P/E: 9.4 Forward P/E: 9.22 Industry P/E: 15.46 P/S: 1.96 Price/Book: 0.83 EV/EBITDA: N/A Market Cap: $118.78M Avg. Daily Volume: 10,386 52 Week Range: $16.77 – $25 5. CA Technologies CA: $19.56 Director Renato Zambonini acquired 25,000 shares of this IT services company paying $19.39 per share for a total amount of $484,717. P/E: 12.85 Forward P/E: 9.73 Industry P/E: 23.36 P/S: 2.27 Price/Book: 1.94 EV/EBITDA: 5.7 Market Cap: $10.09B Avg. Daily Volume: 6,051,820 52 Week Range: $17.8 – $24.15 Another insider purchase worth mentioning is the purchase of 6,100 shares for $453,347 by the Chief Scientific Officer of Laboratory Corp of America (LH). Notable Insider Sales: 1. Nxstage Medical, Inc. NXTM: $15.79 Director David S Utterberg sold 715,000 shares for $15.84, generating $11.32 million from the sale. Director Philippe Chambon sold 383,473 shares for $16.83, generating $6.54 million from the sale. Two other directors also sold stock last week but those sales were options related sales. P/E: N/A Forward P/E: N/A Industry P/E: 17.87 P/S: 4.64 Price/Book: 9.6 EV/EBITDA: -82.88 Market Cap: $766.70M Avg. Daily Volume: 354,611 52 Week Range: $5.25 – $17.28 2. Informatica Corporation INFA: $30.13 EVP Worldwide Sales, Paul J Hoffman, sold 215,264 shares for $30.25 per share, generating $6.51 million from the sale. Two other directors also sold stock but those were once again options related sales. P/E: 43.29 Forward P/E: 23.72 Industry P/E: 23.59 P/S: 4.88 Price/Book: 5.2 EV/EBITDA: 19.95 Market Cap: $2.76B Avg. Daily Volume: 1,600,540 52 Week Range: $17.2 – $31.42 3. Core Laboratories NV CLB: $77.25 Chief Executive Officer David Demshur sold 133,683 shares of this oil & gas equipment and services provider for $76.07 per share, generating $7.61 million from the sale. Director Joseph Perna sold 33,683 shares for $78.44 per share generating, $2.64 million from the sale. P/E: 30.11 Forward P/E: 21.34 Industry P/E: 23.23 P/S: 4.95 Price/Book: 14.23 EV/EBITDA: 15.9 Market Cap: $3.70B Avg. Daily Volume: 603,033 52 Week Range: $41.48 – $83.99 4. Red Hat, Inc. RHT: $32.15 EVP, Engineering Paul J Cormier sold 240,353 shares of this open source software provider for $33 per share, generating $7.93 million from the sale. I can still recollect looking at Red Hat stock when it was trading around $4 in 2001 after the tech bubble burst and hesitating pulling the trigger. P/E: 66.98 Forward P/E: 36.95 Industry P/E: 23.36 P/S: 7.72 Price/Book: 5.47 EV/EBITDA: 31.81 Market Cap: $6.07B Avg. Daily Volume: 2,981,560 52 Week Range: $20.58 – $33.64 5. Apollo Group Inc. APOL: $46.13 Apollo makes it to our list for a third week in a row. Vice Chairman of the Board Peter V Sperling sold 150,000 shares of this for-profit education company (Apollo is the parent company of the widely recognized University of Phoenix) for $48.72 per share, generating $7.31 million from the sale. Director Sue Redman sold 2,015 shares for $50 per share, generating $100,750 from the sale. P/E: 11.82 Forward P/E: 8.24 Industry P/E: 20.03 P/S: 1.46 Price/Book: 5.01 EV/EBITDA: 4.25 Market Cap: $6.81B Avg. Daily Volume: 3,676,690 52 Week Range: $41.45 – $76.86