Welcome to edition 138 of Insider Weekends. Insider buying decreased with insiders purchasing $25.42 million of their stock last week compared to $111.09 million in the week prior. Selling increased with insiders selling $701.64 million of stock last week compared to $385.32 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 27.6. 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 3.47. 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.
Just as the majority of insider buying last week was related to Carl Icahn’s $100 million purchase of CVR Refining (CVRR), a majority of insider selling this week was related to sales of $423.76 million by shareholders of Cobalt International Energy (CIE) in a secondary offering. Excluding those sales, the Sell/Buy ratio would have dropped to 10.93.
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. Huntington Bancshares Incorporated (HBAN): $6.93
President, CEO & Chairman Stephen D. Steinour acquired 40,000 shares of this regional bank, paying $7.04 per share for a total amount of $281,587. Mr. Steinour increased his stake by 1.88% to 2,172,991 shares with this purchase.