Welcome to edition 139 of Insider Weekends. Insider buying increased with insiders purchasing $34.13 million of their stock last week compared to $25.42 million in the week prior. Selling also increased with insiders selling $1.03 billion of stock last week compared to $701.64 million in the week prior.
One noteworthy sale that is not included in the top 5 sales below because it was sale by a fund manager, was Dan Loeb’s sale of 11 million shares of Yahoo! (YHOO) for a total of $216.64 million. The fund continues to hold 62 million shares of Yahoo! after this sale.
Third Point’s Dan Loeb picked up a large stake in Yahoo in the first quarter of 2012. He then waged a proxy battle with Yahoo! to get himself and a slate of three additional directors appointed to Yahoo’s board of directors and to replace CEO Scott Thompson. Mr. Loeb even launched an interesting website called Value Yahoo! making his case for why Yahoo! needed a change of leadership and direction. Dan Loeb managed to get himself elected to Yahoo’s board and as we reported last July, he purchased an additional 2.5 million shares at an average price of $15.77 following the appointment of Marissa Mayer as the new CEO of the company.
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 30.23. In other words, insiders sold more than 30 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 27.6. 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.