Welcome to edition eighty five of Insider Weekends. Insider buying declined sharply with insiders purchasing $28.83 million of their stock last week compared to $88.3 million in the week prior. Selling on the other hand increased with insiders selling $580.05 million worth of stock last week compared to $368.3 million in the week prior.
While Carl Icahn, Eddie Lampert and Sardar Biglari continued their purchases of WebMD (WBMD), Sears Holdings (SHLD) and Cracker Barrel (CBRL) respectively, their purchases were smaller than those we reported last week. Sears Holding in particular has been on fire since Mr. Lampert started buying, making it the largest percentage gainer in the S&P 500 in 2012 with a 54% gain since the start of the year.
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 jumped to 20.12. In other words, insiders sold more than 20 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 4.2.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. GeoEye, Inc. (GEOY): $22.04
We normally don’t include purchases by 10% owners but I decided to make an exception this week to highlight Stephen Feinberg’s purchases of GeoEye through his fund Cerberus Capital Management.