Insider buying decreased once again last week with insiders purchasing $51.69 million of stock compared to $60.83 million in the week prior. This is the third consecutive week of declines in insider buying. Selling on the other hand increased with insiders selling $2.14 billion of stock last week compared to $1.74 billion in the week prior. We normally see a decline in both insider buying and selling during earnings-related quiet periods but this quarter while we have seen a decline in buying, selling has headed in the other direction and has ramped up.

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 went up to 41.34. In other words, insiders sold more than 41 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week when the ratio stood at 28.61.

(Source: InsideArbitrage.com database)

Note: As mentioned in the first post in this series, 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.

Notable Insider Buys

1. Gossamer Bio, Inc. (NASDAQ:GOSS): $9.68

Shares of this biotech company were acquired by 3 insiders:

  • Director Faheem Hasnain acquired 96,520 shares, paying $10.36 per share for a total amount of $999,995. These shares were purchased indirectly through a trust.
  • Chief Financial Officer Bryan Giraudo acquired 3,000 shares, paying $10.01 per share for a total amount of $30,036. These shares were purchased indirectly through a trust.
  • EVP & General Counsel Waage Christian acquired 2,500 shares, paying $9.53 per share for a total amount of $23,818. These shares were purchased indirectly through a trust.

Gossamer saw its stock price decline more than 25% last week after the company announced that two Phase 2 studies of its leading drug candidate GB001 for the treatment of asthma and rhinosinusitis failed to meet primary endpoints. The stock is down 41% over the last year and despite insider purchases in September 2019 and last week, I can see why investors are not as enthusiastic as insiders.

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P/E: N/A Forward P/E: -3.05 Industry P/E: N/A
P/S: N/A Price/Book: 1.66 EV/EBITDA: -1.28
Market Cap: $696.85M Avg. Daily Volume: 696,675 52 Week Range: $7.52 – $27.15

2. Selecta Biosciences, Inc. (NASDAQ:SELB): $2.49

Director Timothy A. Springer acquired 276,703 shares of this biotech company, paying $2.00 per share for a total amount of $552,465. These shares were purchased indirectly by TAS Partners LLC.

Selecta Biosciences headed in the opposite direction of Gossamer Bio with the stock gaining more than 23% last week with no other news besides this insider purchase. Dr. Springer is a Professor at Harvard University and has served as a scientific advisor to Selecta Biosciences since December 2008. He joined the board of directors in June 2016. With this latest purchase, he now owns 15% of common shares outstanding.

P/E: N/A Forward P/E: -10.38 Industry P/E: N/A
P/S: 40.09 Price/Book: N/A EV/EBITDA: -3.97
Market Cap: $266.79M Avg. Daily Volume: 1,675,566 52 Week Range: $1.28 – $4.83

3. Citigroup Inc. (NYSE:C): $43.19

Director Lew W. Jacobs IV acquired 10,000 shares of Citigroup, paying $44.09 per share for a total amount of $440,857.

P/E: 8.4 Forward P/E: 7.55 Industry P/E: 12.84
P/S: 1.55 Price/Book: 0.51 EV/EBITDA: N/A
Market Cap: $89.92B Avg. Daily Volume: 23,688,973 52 Week Range: $32 – $83.11

4. Loop Industries, Inc. (NASDAQ:LOOP): $7.845

Shares of this specialty chemicals company were acquired by 4 insiders:

  • President and CEO Daniel Solomita acquired 10,000 shares, paying $7.31 per share for a total amount of $73,080. Mr. Solomita increased his stake by 5.00% to 210,000 shares with this purchase.
  • Director Jay Howard Stubina acquired 10,000 shares, paying $8.58 per share for a total amount of $85,800.
  • Director Laurence G. Sellyn acquired 10,000 shares, paying $8.04 per share for a total amount of $80,390. Mr. Sellyn increased his stake by 589.97% to 11,695 shares with this purchase.
  • COO and CFO Nelson Gentiletti acquired 5,000 shares, paying $7.30 per share for a total amount of $36,525. Mr. Gentiletti increased his stake by 70.59% to 12,083 shares with this purchase.
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Loop Industries claims to have a revolutionary plastic recycling technology that in the company’s words, “allows for all types of waste PET plastic and polyester fiber to be upcycled into high purity PET plastic suitable for use in food-grade packaging, like the kind used in water bottles.” The company has not generated any revenue over the last six years and losses have accelerated in the last few quarters. I tweeted the following after this cluster of insider purchases last week:

P/E: N/A Forward P/E: -19.13 Industry P/E: 128.76
P/S: N/A Price/Book: 9.92 EV/EBITDA: -21.3
Market Cap: $328.04M Avg. Daily Volume: 265,852 52 Week Range: $6.05 – $13.96

5. BioVie Inc. (NASDAQ:BIVI): $9.75

Director Steve Gorlin acquired 20,000 shares of this biotech company, paying $9.86 per share for a total amount of $197,154.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: -22.09
Market Cap: $135.68M Avg. Daily Volume: 64,900 52 Week Range: $8.76 – $12

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

Notable Insider Sales

1. Okta, Inc. (NASDAQ:OKTA): $243.95

Shares of this software security company were sold by 3 insiders:

  • Director Benjamin A. Horowitz sold 150,000 shares for $245.31, generating $36.79 million from the sale. These shares were sold indirectly through a trust.
  • President, Worldwide Field Operations Charles Race sold 50,000 shares for $237.26, generating $11,863,198 from the sale.
  • Chief Financial Officer William E. Losch sold 30,000 shares for $244.44, generating $7,333,346 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

P/E: N/A Forward P/E: 2217.73 Industry P/E: N/A
P/S: 44.41 Price/Book: 45.61 EV/EBITDA: -173.88
Market Cap: $31.25B Avg. Daily Volume: 1,412,930 52 Week Range: $88.66 – $251.18

2. Paycom Software, Inc. (NYSE:PAYC): $381.8

President and CEO Chad R. Richison sold 135,000 shares of this software application company for $367.96, generating $49.67 million from the sale.

P/E: 126.51 Forward P/E: 91.56 Industry P/E: 61.54
P/S: 28.2 Price/Book: 37.53 EV/EBITDA: 85.84
Market Cap: $22.35B Avg. Daily Volume: 477,258 52 Week Range: $163.42 – $385.02
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3. Apple Inc. (NASDAQ:AAPL): $119.02

Senior Vice President, CFO Luca Maestri sold 243,431 shares of Apple for $116.89, generating $28.45 million from the sale.

P/E: 36.11 Forward P/E: 30.75 Industry P/E: 33.41
P/S: 7.43 Price/Book: 28.22 EV/EBITDA: 26.61
Market Cap: $2.04T Avg. Daily Volume: 173,112,023 52 Week Range: $53.1525 – $137.98

4. salesforce.com, inc. (NYSE:CRM): $258.55

Shares of this software application company were sold by 3 insiders:

  • Chairman of the Board & CEO Marc Benioff sold 75,000 shares for $263.85, generating $19.79 million from the sale.
  • President and CLO Amy E. Weaver sold 5,800 shares for $258.11, generating $1.49 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Co-Founder and CTO Parker Harris sold 5,000 shares for $266.91, generating $1.33 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

P/E: 99.79 Forward P/E: 68.58 Industry P/E: 61.54
P/S: 12.14 Price/Book: 6.11 EV/EBITDA: 110.93
Market Cap: $235.28B Avg. Daily Volume: 7,580,190 52 Week Range: $115.29 – $284.5

5. Workday, Inc. (NASDAQ:WDAY): $229.45

COO & Executive Vice President James Bozzini sold 59,000 shares of this software application company for $227.10, generating $13.39 million from the sale. These shares were sold indirectly through a trust.

P/E: N/A Forward P/E: 78.04 Industry P/E: 61.54
P/S: 13.61 Price/Book: 19.17 EV/EBITDA: -1156.81
Market Cap: $54.38B Avg. Daily Volume: 1,883,664 52 Week Range: $107.75 – $248.75

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

Disclosure: I am/we are long WDAY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: I hold a long position in Workday (WDAY). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.



Via SeekingAlpha.com