Subscribe Today

Get our free articles delivered directly to your email!

Continue reading

Insider Weekends – December 13, 2013

  • December 15, 2013

Welcome to edition 182 of Insider Weekends. Insider buying doubled with insiders purchasing $144.43 million of their stock last week compared to $69.73 million in the week prior. Selling also increased sharply with insiders selling $2.32 Billion of stock last week compared to $990.8 billion in the week prior. A majority of the insider buying this week was driven by a $76 million purchase of DaVita Healthcare Partners (DVA) by Berkshire Hathaway (BRK-A) and a $19.48 million purchase of Nuance (NUAN) by Carl Icahn.

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 increased to 16.1. In other words, insiders sold more than 16 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 14.2. 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:

Some of the insider purchases that did not make the top 5 list but are worth exploring include a purchase by the CEO of Model N (MODN), a cluster of purchases by the insiders of Magnum Hunter Resources (MHR), additional purchases by insiders of Halcon Resources (HK) and additional purchases by insiders of Digital Realty Trust (DLR).

Only plus or premium subscribers can access this post. Subscribe today.