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Insider Weekends – July 6, 2012

  • July 8, 2012

Welcome to edition 109 of Insider Weekends. Insider buying increased slightly with insiders purchasing $37.6 million of their stock last week compared to $37.2 million in the week prior. Selling also increased with insiders selling $435.1 million worth of stock last week compared to $340.6 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 went up to 11.6. In other words, insiders sold almost 12 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 9.1. 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.

Notable Insider Buys:

1. Opko Health, Inc. (OPK): $4.67

CEO & Chairman Phillip Frost M.D. acquired 187,500 shares of this medical devices and drug development company, paying $4.68 per share for a total amount of $877,855. These shares were purchased indirectly by Frost Gamma Investments Trust.

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