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Welcome to edition forty five of Insider Weekends. Insider buying increased with insiders purchasing $151.3 million of their stock last week when compared to $84.92 million in the week prior. As discussed below, $125 million of these purchases is related to the Jefferies secondary offering. Selling also increased with insiders selling $822.65 million worth of stock when compared to $817.87 million in the week prior.
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 dropped to 5.44. In other words, insiders sold more than 5 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 9.63. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.
Note: As mentioned in the first post in this series Introduction to Insider Weekends, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.
Notable Insider Buys:
1. Jefferies Group Inc. (JEF): $23.96
Director Joseph S. Steinberg acquired 5,154,639 shares of this investment bank, paying $24.25 per share for a total amount of $125 million. This was an indirect purchase by Leucadia National Corporation (LUK).