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Welcome to edition 137 of Insider Weekends. Insider buying increased with insiders purchasing $111.09 million of their stock last week compared to $83 million in the week prior. Selling also increased with insiders selling $385.32 million of stock last week compared to $220.36 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 3.47. In other words, insiders sold more than 3 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 2.65. 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.
A majority of the insider buying was related to Carl Icahn’s $100 million purchase of CVR Refining (CVRR), which was spun out of CVR Energy (CVI) last week.
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. Agree Realty Corp. (ADC): $28.25
Director John Rakolta Jr. acquired 50,000 shares of this retail REIT, paying $27.25 per share for a total amount of $1.36 million. Mr. Rakolta doubled his stake to 100,000 shares with this purchase. There have been nothing but insider purchases at Agree over the last two years. Despite the recent run up in the stock price, the stock still yields 5.7%, well above the average yield of 3.32% of retail REITs and 4.75% yield of free standing retail REITs.