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Welcome to edition 103 of Insider Weekends. Insider buying decreased with insiders purchasing $68.2 million of their stock last week compared to $148.9 million in the week prior. Selling increased with insiders selling $2.2 billion worth of stock last week compared to $1.3 billion 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 went up to 32.7. In other words, insiders sold nearly 33 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 8.8.
A big part of these insider sales was $1.77 billion in IPO related selling by Facebook’s (FB) CEO Mark Zuckerberg and early investor Peter Thiel. Taking these sales out would bring the ratio down to just 6.77 but since we normally retain IPO and secondary offerings related sales, we decided to retain these Facebook sales.
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, 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.