Investors sometimes think they should focus almost exclusively on what’s going on with a company to inform their investment decisions and not pay much attention to the macro environment. This approach can sometimes work, but can be detrimental when the macro environment is in flux, where entire economies or industries can be affected by the prevailing winds of change. We really are in such an environment right now with the specter of higher interest rates on the horizon even as the West watches the Russian invasion of Ukraine. There are always pockets of opportunity, even in a tough macro environment (banks have done very well recently, as have commodities) and if you’re not inclined to buy right now, you can keep adding to your watch list. Having a well-prepared watchlist at hand can be invaluable when conditions turn favorable and allows you to act quickly to take advantage of the opportunity.
Reviewing the insider buy list this weekend felt like I had seen it before and had to go back to check I was editing the right article and hadn’t started to edit an old one inadvertently. Some of the companies on the list this week also saw insider buying the previous week and we have discussed others in recent weeks. The purchase that caught my eye this week was that of independent director Warren Stephens of retail chain Dillard’s (NYSE:DDS). Mr Stephens bought 20,000 shares of Dillard’s for $4.61 million. He is the CEO of private investment bank Stephens. Founded in 1933 and based in Little Rock, Arkansas, Stephens took a small Arkansas-based discount retailer called Walmart public in 1970.
Mr. Stephens has been on the board of Dillard for nearly 20 years and when an independent director with investment experience makes an opportunistic purchase, I take notice. Mr Stephen’s net worth is estimated at $2.9 billion and this purchase is a drop in the bucket for him, but it signals confidence in the business given his last purchase was in 2018 at well priced prices. lower. He also bought 100,000 shares of Dillard during the Great Recession in November 2007 for $17.52. While in the early stages of this buy, as insiders typically are, Dillard has continued to come out of this recession very well with gains of over 1,200% since his purchase, compared to a 196% gain for the S&P. 500. This is also encouraging. that Dillard’s announced a new buyout of $500 million, representing nearly 10% of the company’s market capitalization when the buyout was announced on February 24, 2022. Last quarter, Dillard’s announced a special dividend of $15 per share which was payable to shareholders on December 15, 2021.
Dillard’s Social (source: Dillard’s website)
The company has no net debt on the balance sheet even after including capitalized leases and transactions at a very low valuation of 4.3 times EBITDA and a P/E of 6.54. Retailers have largely benefited from the revival of consumer spending and an omnichannel presence, but the future may not be as favorable as the recent past. Earnings for each of the next two fiscal years are expected to fall sharply, and Seeking Alpha author Adam Levine-Weinberg explains very well why the stock can be a value trap in this article.
Welcome to issue 608 of Insider Weekends. Insider buying increased last week, with insiders buying $154.36 million worth of shares, compared to $154.03 million the previous week. Sales fell to $815.51 million from $946.14 million the previous week.
Sale/purchase ratio: The insider sell/buy ratio is calculated by dividing the total insider sells in a given week by the total insider buys that week. The adjusted ratio for the past week fell to 5.28. In other words, insiders sold more than 5 times as many shares as they bought. The sell/buy ratio this week was favorable compared to the previous week when the ratio stood at 6.14.
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Notable Insider Buys:
1. EverQuote, Inc. (NASDAQ: EVER): $13.98
Director David B. Blundin acquired 1,004,016 shares of this online market for insurance shopping, paying $14.94 per share for a total consideration of $14.99 million. These shares were purchased indirectly by Recognition Capital, LLC.
You can view the list of recent insider transactions for EverQuote, Inc. here.
P/E: N/A Forward P/E: -21.84 Industry P/E: 22.46 P/S: 0.99 Price/Book: 4.81 EV/EBITDA: -24.01 Market Cap: 413 $.58M Avg. Daily volume: 377,791 52 week range: $11,725 – $50.5
2. IAA, Inc. (NYSE: IAA): $36.72
Director Peter Kamin acquired 189,100 shares of this provider of auction solutions for lost, damaged and low-value vehicles, paying $35.36 per share for a total consideration of $6.69 million. These shares were purchased indirectly by various entities.
You can view the list of recent insider transactions for IAA, Inc. here.
P/E: 16.84 Forward P/E: 15.3 Industry P/E: 54.71 P/S: 2.69 Price/Book: 14.82 EV/EBITDA: 12.91 Market Cap: $4.95B Avg. Daily volume: 1,268,906 52 week range: $32.74 – $64.55
3. Dillard’s, Inc. (NYSE:DDS): $265.92
Director Warren A. Stephens acquired 20,000 shares of this retail chain, paying $230.51 per share for a total consideration of $4.61 million. These shares were purchased indirectly by Stephens Investments Holdings LLC.
You can view the list of recent insider transactions for Dillard’s, Inc. here.
P/E: 6.35 P/E Forward: 16.29 Industry P/E: 13.86 P/S: 0.78 Price/Book: 3.44 EV/EBITDA: 3.63 Market Cap: $5.17B Avg. Daily volume: 272,239 52 week range: $79.06 – $416.71
4. Newmark Group, Inc. (NASDAQ: NMRK): $18
Chairman Howard W. Lutnick acquired 126,500 shares of this real estate services company, paying $16.63 per share for a total consideration of $2.1 million. These shares were purchased indirectly by CF Group Management, Inc.
You can view the list of recent insider transactions for Newmark Group, Inc. here.
P/E: 4.74 P/E Forward: 8.96 Industry P/E: 61.53 P/S: 1.32 Price/Book: 2.06 EV/EBITDA: 28.06 Market Cap: $3.83B Avg. Daily volume: 1,319,195 52 week range: $9.35 – $19.1
5. Mohawk Industries, Inc. (NYSE: MHK): $144.27
President and COO Chistopher Wellborn acquired 10,000 shares of this home flooring products company, paying $135.76 per share for a total consideration of $1.36 million. Mr. Wellborn increased his stake by 7.16% to 149,747 shares with this purchase.
You can view the list of recent insider transactions for Mohawk Industries, Inc. here.
P/E: 2.89 P/E Forward: 8.35 Industry P/E: 10.6 P/S: 0.87 Price/Book: 1.15 EV/EBITDA: 5.93 Market Cap: $9.77B Avg. Daily volume: 616,655 52 week range: $132.02 – $231.8
You can view the full list of buys from this insider buying page.
Notable insider sales:
1. Bunge Limited (NYSE: BG): $105.19
Director Paul J. Friborg sold 400,000 shares of this agribusiness company for $99.87, generating $39.95 million from the sale. These shares were sold indirectly by Continental Grain.
You can view the list of recent insider transactions for Bunge Limited here.
P/E: 7.82 Forward P/E: 12.2 Industry P/E: 20.42 P/S: 0.25 Price/Book: 2.04 EV/EBITDA: 8.42 Market capitalization: 14.78 B$ Avg. Daily Volume: 1,075,232 52 Week Range: $71.73 – $105.29
2. Omega Flex, Inc. (NASDAQ: OFLX): $146
Shares of this manufacturer of metal hoses and accessories were sold by 3 insiders:
- Chief Operating Officer Mark F. Albino sold 40,517 shares for $137.72, generating $5.58 million from the sale.
- Director Stewart B. Reed sold 40,517 shares for $137.72, generating $5.58 million from the sale.
- Chairman and CEO Kevin R. Hoben sold 40,517 shares for $137.72, generating $5.58 million from the sale.
You can view the list of recent insider trades for Omega Flex, Inc. here.
P/E: 57.17 P/E forward: N/AP/E industrial: 20.59 P/S: 11.68 Price/Book: 26.42 EV/EBITDA: 43.36 Market capitalization: 1.47 B $ Avg. Daily volume: 14,218 52 week range: $109 – $179.49
3. The Charles Schwab Company (NYSE: SCHW): $85.75
Chairman Charles R. Schwab sold 156,860 shares of Charles Schwab for $85.93, generating $13.48 million from the sale. These shares were sold indirectly by a trust.
You can view the list of recent insider transactions for The Charles Schwab Corporation here.
P/E: 30.3 Forward P/E: 17.79 Industry P/E: N/AP/S: 8.75 Price/Book: 3.41 EV/EBITDA: N/A Market Cap: 162.12 B $ Avg. Daily volume: 7,606,891 52 week range: $62.33 – $96.24
4. DoorDash, Inc. (NYSE: DASH): $100.34
Shares of this online food delivery platform were sold by 7 insiders:
- Chief Financial Officer Prabir Adarkar sold 66,102 shares for $95.28, generating $6.29 million from the sale.
- President and COO Christopher D. Payne sold 22,787 shares for $95.13, generating $2.17 million from the sale.
- Trading manager Keith Yandell sold 16,894 shares for $95.04, generating $1.61 million from the sale.
- Director Andy Fang sold 7,753 shares for $95.10, generating $737,302 from the sale.
- Accounting manager Gordon S. Lee sold 5,983 shares for $94.78, generating $567,058 from the sale.
- Director Stanley Tang sold 4,323 shares for $94.83, generating $409,941 from the sale.
- General Counsel and Secretary Tia Sherringham sold 1,604 shares for $94.68, generating $151,863 from the sale.
You can view the list of recent insider transactions for DoorDash, Inc. here.
P/E: N/A Forward P/E: -233.35 Industry P/E: 34.07 P/S: 7.04 Price/Book: 7.41 EV/EBITDA: -94.35 Market Cap: 34 $.42B Avg. Daily volume: 5,290,737 52 week range: $85.177 – $257.25
5. Palantir Technologies Inc. (NYSE: PLTR): $11.47
Palantir shares were sold by 5 insiders:
- Chairman and Secretary Stephen Andrew Cohen sold 345,018 shares for $10.70, generating $3.69 million from the sale.
- Chief operating officer and executive vice president Shyam Sankar sold 266,872 shares for $10.70, generating $2.85 million from the sale.
- Chief Financial Officer and Treasurer David A. Glazer sold 201,190 shares for $11.07, generating $2.23 million from the sale.
- Director of Legal and Business Affairs Ryan D. Taylor sold 162,500 shares for $10.95, generating $1.78 million from the sale.
- Accounting director Jeffrey Buckley sold 34,000 shares for $10.59, generating $359,923 from the sale.
You can view the list of recent insider transactions for Palantir Technologies Inc. here.
P/E: N/A Forward P/E: 42.48 Industry P/E: 53.71 P/S: 15.1 Price/Book: 10.07 EV/EBITDA: -54.36 Market cap: 23, $29B Avg. Daily volume: 50,093,583 52 week range: $9.74 – $29.29
You can view the full list of sales from this insider sales page.