Welcome to edition 136 of Insider Weekends. Insider buying increased with insiders purchasing $83 million of their stock last week compared to $45.83 million in the week prior. Selling decreased with insiders selling $220.36 million of stock last week compared to $655.73 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 dropped to 2.65. In other words, insiders sold almost 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 14.31. This the lowest ratio we have seen in over 7 months. Before interpreting this as a wildly bullish signal, it is worth keeping in mind that we are just coming off several weeks of insider sales related to taking advantage of lower capital gains rates in 2012. We are also at the start of a new quarter when company insiders hold off on transactions until earnings are released. 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): $5.38
CEO & Chairman Phillip Frost M.D. acquired 136,000 shares of this medical devices and drug development company, paying $5.22 per share for a total amount of $709,596. These shares were purchased indirectly by Frost Gamma Investments Trust.