Over the past couple of weeks we have seen the CEOs of Winmark Corp and Endurance Specialty Holdings make notable increases in their holdings of their respective companies. Both the Chairman and CEO of Endurance Specialty Holdings, John Charman, and the Chairman and CEO of Winmark, John Morgan, have made these increases as their companies’ share prices come exceptionally close to their 52-week low. These are also the second consecutive large buys for each CEO in a week’s time frame.
Winmark Corp (WINA)
Most recently, and as the share price continues to drop, the Chairman and CEO of Winmark made his second buy back into his company. John Morgan added 2,000 shares to his holdings on June 16 at a price of $65.80 per share. This transaction cost him a total of $131,600, and since this buy the price per share has continued to drop an additional -0.38%.
Chairman and CEO of Winmark, John Morgan, also made a large insider buy on June 10. The CEO purchased 4,500 shares of his company’s stock at $66.33 per share. This transaction cost Morgan a total of $298,485. Since his buy the price per share has dropped approximately -1.18%. Morgan then held on to 1,708,910 shares of the company’s stock.
Prior to his most recent increase in buying the CEO last made a buy in April of 2014, and since then the price per share is down over -15%.
Winmark is a franchisor of value-oriented retail store concepts that buy, sell, trade and consign merchandise. It currently has two reportable business segments, franchising and leasing. Play It Again Sports, Plato's Closet, Once Upon a Child, Music Go Round, Winmark, Winmark Business Solutions, Wirth Business Credit, Winmark Capital and LeaseManager, among others, are its registered service marks.
Winmark’s historical revenue and net income:
The analysis on Winmark reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding, and its dividend yield is close to a 5-year high.
The company most recently announced an increase in its quarterly cash dividend. On May 1, the company announced that the company’s new dividend would be $0.06 per share, representing a $0.01 increase from the previous quarter. This dividend was paid to shareholders on June 2.
The Peter Lynch Chart suggests that the company is currently overvalued:
Winmark has a market cap of $336.00 million. Its shares are currently trading at around $65.60 with a P/E ratio of 18.40, a P/S ratio of 6.10 and a P/B ratio of 20.80. Winmark had an annual average earnings growth of 27% over the past ten years.
GuruFocus rated Winmark the business predictability rank of 2-star.
Endurance Specialty Holdings (ENH)
As the company’s share price continues to hang out near a 52-week low, Endurance Specialty Holdings’ Chairman and CEO John Charman made a second large buy into his company’s stock. Most recently the CEO added 13,929 shares to his holdings. He bought these shares at the average price of $51.17 per share for a total transaction amount of $712,747. Since his buy the price per share has increased approximately 0.84%. Charman now holds on to 1,367,944 shares of his company’s stock.
On June 11, the chairman and CEO made an even larger insider buy into his company. The CEO added 35,630 shares to his holdings at $40.96 per share. This transaction cost the CEO a total of $1,459,405. Since his buy the price per share has increased approximately 25.98%. Charman then held on to 1,354,315 shares of his company’s stock.
These are the first insider buys since March 2014, and prior to that the most recent insider transaction was made in 2004.
Endurance Specialty Holdings is a holding company of providers of property and casualty insurance and reinsurance. The Company's portfolio of specialty lines of business is organized into two business segments - Insurance and Reinsurance.
Endurance Specialty Holdings’ historical revenue and net income:
The analysis on Endurance Specialty Holdings reports that the company’s revenue per share has been in decline over the past year, its price is near a 10-year high, and P/E and P/B ratios are trading at near historic lows.
The company recently commenced an exchange offer to acquire all Aspen Insurance Holdings common shares. The company commenced this action on June 9, and each holder of Aspen common shares will have the right to receive for their Aspen common shares, at their election: all cash ($49.50 for each Aspen share); all Endurance common shares (0.9197 Endurance shares for each Aspen share); or a combination of cash and Endurance common shares (0.5518 Endurance common shares and $19.80 in cash for each Aspen share). The exchange offer ends at the close of market on Aug. 29, 2014.
The company’s first quarter results reported:
- Gross premiums written decreased 1.7% from last year to $1.157.5 billion.
- Net investment income of $41.0 million, down $8.3 million from last year.
- Operating income of $94.4 million, or $2.12 per diluted share.
- Fully diluted book value per share of $57.53, an increase of 4.3% from last year.
The Peter Lynch Chart suggests that the company is currently undervalued:
Endurance Specialty Holdings has a market cap of $2.3 billion. Its shares are currently trading at around $51.49 with a P/E ratio of 8.20, a P/S ratio of 1.00 and a P/B ratio of 0.80. The dividend of the company’s stocks is at 2.50%
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