One of the patterns we like to see with insider buying is a long-serving Director of the company purchasing shares opportunistically. If that Director also happens to have an investing background, we like it even better. The cherry on the top is the company also buying back stock on the open market. We saw all these factors come together last week when Thomas Gayner purchased 5,000 shares of Cable One (CABO) for Markel (MKL). Investors that follow Berkshire Hathaway and Fairfax Financial are also familiar with the third leg of the trinity of holding companies, Markel. This interview by Barry Ritholtz of Thomas Gayner on his Masters in Business podcast provides an excellent overview of Markel and its Chief Investment Officer and Co-CEO, Thomas Gayner. The little exchange they have about Mr. Gayner, as a 22 year old, discovering Berkshire when the stock was trading at around $375 and not buying it until the stock had gotten to $5,750 was amusing.
So, it was 1984, I was 22 years old, and I — I went into Joe’s office and I said, “Hey, Joe, have you ever heard of this guy named Warren Buffett.” And Joe was sort of a crusty fella, and he says, “It’s a Buffett, you idiot, and threw me out.”
Well, I went to the cutting-edge technology of the day, which was the Standard & Poor’s tear sheet.
And I — and I looked at the Berkshire Hathaway page. And my training is as an accountant. I started out as a CPA with PricewaterhouseCoopers. And I looked at those numbers, and I could tell without resorting to four decimal point calculations, they were good.
Mr. Gayner has served on Cable One’s board since 2015, when the company was spun out of Graham Holdings (GHC). He has also served on Graham Holdings’ board for over 15 years. Graham Holdings currently holds education services company Kaplan and a group of other diverse businesses after selling Washington Post to Jeff Bezos in 2013, two years before the Cable One spinoff. Getting back to Cable One, the company announced an additional $450 million share buyback program last month. The prior repurchase program established in 2015, still has $75.4 million remaining. It is interesting to see the company choose to buyback shares instead of paying down its considerable debt.
Despite declining nearly 26% year-to-date, the stock isn’t exactly cheap at the moment, trading at a forward P/E of 19 and a forward EV/EBITDA of 12. The company reported Q1 2022 earnings of $12.97 per share that beat analyst estimates by $1.66. Revenue of $426.73 million was up 25% year-over-year but down sequentially. Four analysts revised their earnings estimates higher during the last 90 days.
The rest of the top insider purchases this week were an odd bunch of companies including a development-stage oncology focused biotech, two companies that went public through SPACs and an electric car company. Each of them are down significantly this year and I covered the dismal performance of SPAC business combinations in a Twitter thread last week.
Welcome to edition 622 of Insider Weekends. Insider buying decreased last week with insiders purchasing $60.26 million of stock compared to $115.85 million in the week prior. Selling also declined to $802.51 million compared to $944.38 million in the week prior. For a second week in a row we saw a decline in both the number of insiders purchasing stock as well as a decline in absolute dollar terms.
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 13.32. In other words, insiders sold more than 13 times as much stock as they purchased. The Sell/Buy ratio this week was unfavorable compared to the prior week when the ratio stood at 8.15.
Notable Insider Buys:
1. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA): $7.85
Shares of this biotech company were acquired by 5 insiders:
- Director Wayne P. Rothbaum acquired 1,000,000 shares, paying $6.60 per share for a total amount of $6.6 million. These shares were purchased indirectly by Quogue Capital LLC.
- Director Merrill A. McPeak acquired 20,000 shares, paying $6.82 per share for a total amount of $136,400. Mr. McPeak increased his stake by 10.07% to 218,633 shares with this purchase. 10,000 of these shares were purchased indirectly through a trust.
- Director Michael Weiser acquired 10,000 shares, paying $6.80 per share for a total amount of $67,978. Mr. Weiser increased his stake by 9.74% to 112,632 shares with this purchase.
- Director Ryan D. Maynard acquired 7,500 shares, paying $6.74 per share for a total amount of $50,587.
- Interim CEO & General Counsel Frederick G. Vogt acquired 1,000 shares, paying $6.44 per share for a total amount of $6,440.
P/E: N/A Forward P/E: -3.6 Industry P/E: 54.43 P/S: N/A Price/Book: 2.24 EV/EBITDA: -1.79 Market Cap: $1.23B Avg. Daily Volume: 3,554,453 52 Week Range: $6.18 – $28
2. Cable One, Inc. (NYSE:CABO): $1,288.59
Director Thomas Sinnickson Gayner acquired 5,000 shares of this data, video, and voice services provider, paying $1,291.17 per share for a total amount of $6.46 million. These shares were purchased indirectly by Markel Corporation.
P/E: 20.75 Forward P/E: 21.36 Industry P/E: 12.81 P/S: 4.57 Price/Book: 4 EV/EBITDA: 13.07 Market Cap: $7.72B Avg. Daily Volume: 48,428 52 Week Range: $1049.81 – $2136.14
3. Nerdy, Inc. (NYSE:NRDY): $2.87
Chief Executive Officer Charles K. Cohn acquired 790,392 shares of this online tutoring and learning products provider, paying $2.82 per share for a total amount of $2.23 million. These shares were purchased indirectly by various trusts.
P/E: N/A Forward P/E: -6.11 Industry P/E: N/A P/S: 1.7 Price/Book: 5.95 EV/EBITDA: -1.47 Market Cap: $259.82M Avg. Daily Volume: 832,115 52 Week Range: $1.59 – $13.49
4. The Beachbody Company, Inc. (NYSE:BODY): $2.04
Chairman of the Board and Chief Executive Officer Carl Daikeler acquired 588,800 shares of this health and wellness platform, paying $2.20 per share for a total amount of $1,297,451. Mr. Daikeler increased his stake by 25.87% to 2,864,679 shares with this purchase.
P/E: N/A Forward P/E: -7.03 Industry P/E: N/A P/S: 0.75 Price/Book: 1.99 EV/EBITDA: -4.12 Market Cap: $633.94M Avg. Daily Volume: 1,204,107 52 Week Range: $0.91 – $13.5
5. Rivian Automotive, Inc. (NASDAQ:RIVN): $30.19
Director Jay T. Flatley acquired 40,000 shares of this auto manufacturer, paying $29.31 per share for a total amount of $1.17 million. Mr. Flatley increased his stake by 76.02% to 92,616 shares with this purchase.
P/E: N/A Forward P/E: -5.62 Industry P/E: 18.57 P/S: 177.8 Price/Book: 1.49 EV/EBITDA: -2.42 Market Cap: $26.67B Avg. Daily Volume: 21,142,941 52 Week Range: $19.25 – $179.47
Notable Insider Sales:
1. Airbnb, Inc. (NASDAQ:ABNB): $119.83
Shares of Airbnb were sold by 3 insiders:
- Chairman of Airbnb.org Joseph Gebbia sold 446,345 shares for $119.33, generating $53.26 million from the sale. 15,524 of these shares were sold as a result of exercising options immediately prior to the sale.
- Chief Technology Officer Aristotle N. Balogh sold 4,000 shares for $120.63, generating $482,520 from the sale.
- Director Jeffrey D. Jordan sold 3,000 shares for $120.00, generating $360,000 from the sale. These shares were sold indirectly by a trust.
P/E: 93.4 Forward P/E: 47.93 Industry P/E: 267.35 P/S: 11.7 Price/Book: 16.1 EV/EBITDA: 82.31 Market Cap: $77.37B Avg. Daily Volume: 6,499,204 52 Week Range: $103.741 – $212.584
2. NVIDIA Corporation (NASDAQ:NVDA): $187.2
Shares of this semiconductor company were sold by 2 insiders:
- Director Mark A. Stevens sold 278,000 shares for $185.20, generating $51.49 million from the sale. These shares were sold indirectly by trusts.
- Director John Dabiri sold 2,200 shares for $185.59, generating $408,298 from the sale.
P/E: 50.2 Forward P/E: 29.02 Industry P/E: 22.7 P/S: 15.79 Price/Book: 17.81 EV/EBITDA: 36.66 Market Cap: $466.5B Avg. Daily Volume: 58,383,912 52 Week Range: $155.67 – $346.47
3. Arista Networks, Inc. (NYSE:ANET): $103.17
Shares of this networking company were sold by 5 insiders:
- Chief Development Officer Andreas Bechtolsheim sold 401,500 shares for $103.78, generating $41.67 million from the sale. 200,000 of these shares were sold indirectly by a trust and 1,500 of these shares were sold as a result of exercising options immediately prior to the sale.
- Senior Vice President, CFO Ita M. Brennan sold 14,800 shares for $102.14, generating $1.51 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- SVP and General Counsel Marc Taxay sold 6,779 shares for $102.32, generating $693,636 from the sale. 1,040 of these shares were sold as a result of exercising options immediately prior to the sale.
- Director Charles H. Giancarlo sold 6,660 shares for $102.11, generating $680,035 from the sale. These shares were sold indirectly by a trust.
- Chief Platform Officer John F. Mccool sold 1,000 shares for $103.50, generating $103,500 from the sale.
P/E: 35.45 Forward P/E: 24.22 Industry P/E: 20.41 P/S: 10.04 Price/Book: 7.66 EV/EBITDA: 28.03 Market Cap: $31.7B Avg. Daily Volume: 1,991,388 52 Week Range: $85.18 – $148.57
4. McKesson Corporation (NYSE:MCK): $316.38
Shares of this healthcare products and services provider were sold by 4 insiders:
- EVP & CFO Britt J. Vitalone sold 27,281 shares for $333.16, generating $9.09 million from the sale.
- EVP & Chief HR Officer Tracy Faber sold 7,979 shares for $331.79, generating $2.65 million from the sale.
- EVP, Chief Legal Officer & GC Lori A. Schechter sold 6,838 shares for $331.36, generating $2.27 million from the sale.
- EVP, CIO & CTO Nancy Flores sold 2,061 shares for $332.87, generating $686,044 from the sale.
P/E: 43.77 Forward P/E: 12.41 Industry P/E: 22.33 P/S: 0.17 Price/Book: N/A EV/EBITDA: 15.94 Market Cap: $45.99B Avg. Daily Volume: 1,250,746 52 Week Range: $184.43 – $339.94
5. Chubb Limited (NYSE:CB): $208.53
Shares of this insurance company were sold by 2 insiders:
- President & COO John W. Keogh sold 64,565 shares for $208.39, generating $13.45 million from the sale. 30,101 of these shares were sold as a result of exercising options immediately prior to the sale.
- Director Theodore Shasta sold 812 shares for $209.18, generating $169,854 from the sale.
P/E: 11.1 Forward P/E: 12.35 Industry P/E: 10.63 P/S: 2.18 Price/Book: 1.56 EV/EBITDA: 12.98 Market Cap: $88.36B Avg. Daily Volume: 1,717,955 52 Week Range: $155.78 – $218.99
You can view the full list of sales from this Insider Sales page.
Disclaimer: I hold long positions in Berkshire Hathaway (BRK.B) and Fairfax Financial (FRFHF). 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.
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