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Insider Weekends – March 21, 2014

  • March 24, 2014

Welcome to edition 196 of Insider Weekends. Insider buying increased last week with insiders purchasing $54.45 million of their stock compared to $37.85 million in the week prior. Selling decreased with insiders selling $1.49 billion of stock last week compared to $2.62 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 dropped down to 27.42. In other words, insiders sold more than 27 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 69.3. 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. AGCO Corporation (AGCO): $52.26

Director Mallika Srinivasan acquired 423,719 shares of this farm & construction machinery company, paying $51.93 per share for a total amount of $22 million. These shares were purchased indirectly by TAFE Motors and Tractors Limited.

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