A Board Member Bought Over $200,000 Of Clorox Stock

Page 1 of 2

According to a filing with the SEC, George Harad, a Board member at The Clorox Company (NYSE:CLX), bought 2,000 shares of the stock on December 10th at an average price of $75.95 per share. In addition, a limited partnership bought 1,000 shares at the same price, and Harad appears to have some degree of indirect control of those shares per the Form 4. So nearly $230,000 was invested in Clorox; Harad had previously only owned 1,000 shares, so this is a large percentage increase in his holdings. Studies show that on average insider purchases are bullish signals (read more about studies on insider trading) and we think that this is because insiders have to be confident in the stock to buy it rather than to diversify- it’s not rational to just buy the stock at random intervals. However, we’d note that a number of insiders have been selling Clorox since the beginning of November (see a history of insider sales at Clorox). Insider selling tends to be a more neutral signal, as it’s a good idea for insiders to diversify, but it’s still something to note.

The Clorox Company is best known for its cleaning supplies, but the $10 billion market cap company also sells consumer products such as Glad trash bags, Kingsford charcoal, and Brita water filters. Sales last quarter- which was the first of the fiscal year ending in June 2013- were up slightly from their levels a year earlier, as were earnings. Clorox had $208 million in cash flow from operations for the quarter, of which $54 million were invested and $84 million paid out as dividends. Thanks to large debt borrowings, some of which was used to pay down  notes, the company’s cash position increased by a net $400 million.

RENAISSANCE TECHNOLOGIES

The recent results, and the market capitalization, combine for a trailing P/E multiple of 18, which seems high given that Clorox hasn’t been growing much recently and its product line would normally be considered heavily dependent on staples. This helps make the stock a good defensive pick- the beta is only 0.4, and the dividend yield is above 3% at current prices- but it’s tougher to see a value case. We’ve already covered the fairly high P/E, and the EV/EBITDA multiple of 11.2x is high as well.

Renaissance Technologies, founded by billionaire Jim Simons, increased its holdings of The Clorox Company to a total of about 860,000 shares during the third quarter of 2012 (check out Renaissance’s stock picks). However, a number of notable investors actually exited the long positions they had previously held: our database of 13F filings shows that billionaires George Soros (find Soros’s favorite stocks) and Ken Fisher (see what stocks Fisher likes instead) were among them.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!