Welcome to edition 129 of Insider Weekends. Insider buying decreased with insiders purchasing $60.9 million of their stock last week compared to $155.86 million in the week prior. Selling increased with insiders selling $2.04 billion of stock last week compared to $1.24 billion in the week prior. The big jump in insider selling was driving by secondary offerings by shareholders of industrial products company MRC Global (MRC) and IT services provider SericeNow (NOW). While insider buying dropped, there were a number of interesting purchases of beaten down stocks that did not make the top 5 insider purchases list. As mentioned in one my tweets, some of these stocks that saw insider buying include Constant Contact (CTCT), STEC (STEC), Glu Mobile (GLUU), Audience (ADNC), Molycorp (MCP), MEMC Electronic Materials (WFR) and Strayer Education (STRA).
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 33.54. In other words, insiders sold more than 33 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 7.94. 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. AGCO Corporation (AGCO): $45.61
Director Mallika Srinivasan acquired 350,734 shares of this farm & construction machinery company, paying $44.61 per share for a total amount of $15.65 million. These shares were purchased indirectly by Tractors and Farm Equipment Limited.