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Insider Weekends – February 28, 2014

  • March 1, 2014

Welcome to edition 193 of Insider Weekends. Insider buying increased last week with insiders purchasing $42.18 million of their stock compared to $40.91 million in the week prior. Selling declined with insiders selling $1.84 billion of stock last week compared to $2.39 billion in the week prior.

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 decreased to 43.73. In other words, insiders sold almost 44 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 58.51. 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:

Some of the insider purchases that did not make the top 5 list but are worth exploring include a $1 million purchase of home and commercial security firm Allegion PLC (ALLE) by its CEO, a $487,956 purchase by the CFO of convenience store operator The Pantry (PTRY) and purchases by two directors of rental housing software provider RealPage (RP).

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