Welcome to edition 143 of Insider Weekends. Insider buying picked up with insiders purchasing $25.02 million of their stock last week compared to $14.89 million in the week prior. Selling decreased with insiders selling $1.64 billion of stock last week compared to $3.46 billion in the week prior. As mentioned in our previous article, a large part of the sales last week was related to secondary offerings by professional investors. 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 down to 65.7. In other words, insiders sold almost 66 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 232.51. 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. Digital Generation, Inc. (DGIT): $7.76 Shares of this digital advertising services company were acquired by 3 insiders:
The company lost nearly a third of its value last month, dropping from $8.98 to $6.45, after announcing that it could not find a buyer despite reaching out to 45 potential acquirers. The company also reported Q4 2012 revenue dropped 4% to $103.6 million from $108.3 million. While annual revenue increased 19% to $386.6 million, the company reported a fourth quarter and full year loss. Most of the $238.8 million 2012 loss was related to a $219.6 million goodwill write-off. Adjusted EBITDA for 2012 decreased 7% to $125.7 million compared to $134.6 million for 2011.
2. Opko Health, Inc. (OPK): $6.99 CEO & Chairman Phillip Frost M.D. acquired 272,500 shares of this medical devices and drug development company, paying $7.03 per share for a total amount of $1.92 million. These shares were purchased indirectly by Frost Gamma Investments Trust