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Welcome to edition eighty six of Insider Weekends. Insider buying increased with insiders purchasing $30.96 million of their stock last week compared to $28.83 million in the week prior. Selling also increased with insiders selling $716.8 million worth of stock last week compared to $580.05 million in the week prior. We excluded a large $463 million insider purchase of Icahn Enterprises (IEP) by Carl Icahn because it was related to participation in a rights offering and not an open market purchase.
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 increased to 23.15. In other words, insiders sold more than 23 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 20.12.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. Kronos Worldwide Inc. (KRO): $23.1
Chairman of the Board Harold C. Simmons acquired 81,000 shares of this titanium dioxide producer, paying $21.04 per share for a total amount of $1.7 million. These shares were purchased indirectly by Mr. Simmons’s spouse.