Over the past week we’ve seen several large insider buys as well as several coming from the companies’ CEOs. It is interesting to note when a CEO, or even a CFO, buys because these insiders supposedly have the most intimate knowledge of their company's workings.
The following three CEOs each come from various sectors of the market, but they each reported insider buys with transaction amounts valued at over $100,000. According to GuruFocus Insider Data these are the largest CEO buys occurring over the past week.
Retrophin Inc. (RTRX)
Over the duration of the past week, CEO of Retrophin Martin Shkreli made two buys of his company’s stock. The guru made these two buys on April 2, and purchased a total of 33,300 shares of the company’s stock. He bought these shares in the price range of $22.28 to $22.60 per share, and his total transaction amount equaled $749,124. Since his most recent buy the guru holds on to 2,974,680 shares of his company’s stock. Since his buy the price per share has dropped approximately -8.94%.
CEO Martin Shkrelli maintains a consistent stream of insider buys, check out his buys and sells here.
Retrophin is a biopharmaceutical company focused on the discovery, acquisition, development and commercialization of drugs for the treatment of debilitating and often life-threatening diseases for which there are currently limited patient options. The company is currently focused on several diseases including Focal Segmental Glomerulosclerosis, Pantothenate Kinase-Associated Neurodegeneration and Duchenne Muscular Dystrophy.
Retrophin’s historical revenue and earnings growth:
The analysis on Retrophin reports tha the company’s Piotroski F-Score is low, which generally implies poor business operation, its price is nearing a 3-year high and the company currently holds no debt.
The company recently reported its full-year 2013 results which reported:
- Net loss of $33.8 million, down even lower from 2012s net loss of $30.3.
- Research and development expenses were $7 million, compared to $0.7 million
- Balance sheet includes approximately $6.1 million in cash and cash equivalents.
- Loss from operations of $24 million at year-end.
The company also recently reported the successful completion of the pharmaceutical company Manchester Pharmaceuticals. They completed this transaction for a total of $62.5 million.
Retrophin has a market cap of $458.8 million. Its shares are trading at around $18.91.
Hyde Park Acquisition Corp II (HPAC)
Over the past week Chairman and CEO of Hyde Park Acquisition, Laurence Levy, made the first reported insider buy for the company. Levy added a total of 40,000 shares to his stake at the price of $10.49 per share. This cost the insider a total of $419,600. Since his buy the price per share has dropped a slight -0.19%. Laurence Levy now holds on to a total of 807,565 shares of his company’s stock.
The company is a private investment firm specializing in leveraged buyouts. The company is now called Essex Rental Corp. and in March of 2008 the company acquired all of the outstanding stock of Essex Crane Rental Corp.
Hyde Park’s historical holding history and net income:
On their investor relations page they report that they focus on investing in assets which have:
- High barriers to entry.
- Predictable, sustainable free cash flows.
- Experienced and motivated management.
- Emphasis on free cash flow return on invested capital.
The analysis on the company reports that it holds no debt.
Louis Moore Bacon (Trades, Portfolio) holds on to 367,500 shares of the company’s stock, representing 3.65% of the company’s shares outstanding as well as 0.06% of his portfolio as of the close of the fourth quarter.
Hyde Park Acquisition reports that the company has a market cap of $105.2 million. Its shares are currently trading at around $10.45 with a P/B ratio of 20.50.
Staples (SPLS)
Over the past week Chairman and CEO Ronald Sargent added 8,500 shares to his holdings. The insider purchased these shares at an average price of $11.82 per share costing him a total of $100,470. Since his buy the price per share has increased a slight 0.51%. Sargent now maintains 2,199,445 shares of the company’s stock.
Last month President Shira Goodman made a buy of 5,000 shares at $11.44 per share. Since this buy the price has increased approximately 3.85%.
These two relatively recent buys have come as the company’s price is sitting near its 10-year low price of $10.85 per share.
As shown in the chart above, these are the first insider buys for the company since May 2013.
Staples operates as an office products company. The company's three reportable segments are North American Delivery, North American Retail and International Operations.
Staples’ historical revenue and net income:
The company most recently announced its fourth quarter and full year 2013 performance which highlighted:
- A plan to close up to 225 stores by 2015.
- A $500 million gross cost reduction program.
- Fourth quarter sales were $5.9 billion.
- Online sales up 10% over the fourth quarter.
The analysis on Staples reports that the company’s revenue has been in decline over the past year, it has a strong Piotroski F-Score and its dividend yield is close to a 10-year high. It also reports that the company’s price, P/B ratio and P/S ratio are all near a 10-year low.
The Peter Lynch Chart suggests that the company is currently undervalued:
Staples has a market cap of $7.93 billion. Its shares are currently trading at around $12.18 with a P/E ratio of 12.80, a P/S ratio of 0.30 and a P/B ratio of 1.20. The dividend yield of Staples stock is currently at 3.90%, and the company has seen an annual average earnings growth of 0.50% over the past ten years.
You can view a complete list of CEO buys and sells here.
