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Welcome to edition 161 of Insider Weekends. Insider buying increased with insiders purchasing $124.18 million of their stock last week compared to $16.8 million in the week prior. Selling also increased with insiders selling $1.25 billion of stock last week compared to $441.82 million in the week prior. A large part of the insider buying was driven by a total of $70 million in purchases of truck manufacturer Navistar International (NAV) by Carl Icahn and his former protege Mark Rachesky. It was interesting to watch both of them doubling down on their Navistar investment late last year even as the stock dipped into the high teens.
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 10.08. In other words, insiders sold more than 10 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 26.3. 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. Walgreen Co. (WAG): $50.61
Director and Italian Billionaire Stefano Pessina acquired 34,439 shares of this drug store chain, paying $45.77 per share for a total amount of $1.6 million. These shares were purchased indirectly by a corporation controlled by Mr. Pessina.