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Welcome to edition 142 of Insider Weekends. Insider buying dropped again with insiders purchasing $14.89 million of their stock last week compared to $27.62 million in the week prior. Selling jumped sharply with insiders selling $3.46 billion of stock last week compared to $1.29 billion in the week prior. A large part of this increase was related to sales through secondary offerings by professional investors such as Bain Capital’s sale of sensors manufacturer Sensata Technologies (ST) and hospitals operator HCA Holdings (HCA) as well as CCMP Capital’s sale of generator company Generac Holdings (GNRC).
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 232.51. In other words, insiders sold almost 233 times as much stock as they purchased. After going up for 5 weeks in a row, this is the highest the ratio has ever been since we started computing it in June 2010. Excluding the aforementioned sales by professional investors would have brought the ratio down to 62.5. 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. Echo Global Logistics, Inc. (ECHO): $18.83
Director John R. Walter acquired 80,639 shares of this supply chain management services provider, paying $19.10 per share for a total amount of $1.54 million. Mr. Walter increased his stake by 3041.83% to 83,290 shares with this purchase.