Welcome to edition 147 of Insider Weekends. Insider buying increased with insiders purchasing $90.2 million of their stock last week compared to $71.05 million in the week prior. Selling also increased with insiders selling $1.05 billion of stock last week compared to $980.15 million in the week prior. Since we are at the start of a new quarter, insider activity is likely to be muted over the next couple of weeks. 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 to 11.69. In other words, insiders sold more than 11 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 13.8. 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. AGCO Corporation (AGCO): $50.7 Director Mallika Srinivasan acquired 1,088,695 shares of this farm & construction machinery company, paying $50.94 per share for a total amount of $55.46 million. These shares were purchased indirectly by Tractors and Farm Equipment Limited (TAFE). These purchases follow several purchases by Ms. Srinivasan last September through December where she picked up shares indirectly through TAFE at prices ranging from $43.16 to $46. AGCO also happens to be a large customer of TAFE. Trading at an EV/EBITDA of 5.71 and below 9 times expected 2014 earnings, the stock appears to be attractively valued. You can view the list of recent insider transactions for AGCO Corporation here.
2. Opko Health, Inc. (OPK): $7.17 Shares of this medical devices and drug development company were acquired by 2 insiders:
You can view the list of recent insider transactions for Opko Health, Inc. here.