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Welcome to edition 170 of Insider Weekends. Insider buying plunged sharply with insiders purchasing $10.86 million of their stock last week compared to $54.86 million in the week prior. Selling also decreased with insiders selling $1.12 billion of stock last week compared to $2.85 billion in the week prior. Insider buying has not been this anemic since late April 2012 and I would attribute that April drop to earnings season related caution. If this complete lack of insider enthusiasm combined with Robert Shiller’s PE 10 jumping over 24 does not give investors pause, I am not sure what will.
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 jumped to 102.75. In other words, insiders sold about 103 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 52.02. 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. Clean Energy Fuels Corp. (CLNE): $12.935
CEO and President Andrew J. Littlefair acquired 127,000 shares of this natural gas fueling stations operator, paying $12.69 per share for a total amount of $1.61 million. Mr. Littlefair increased his stake by 36.28% to 477,049 shares with this purchase.