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Insider Weekends – April 18, 2014

  • April 20, 2014

Welcome to edition 200 of Insider Weekends. Insider buying more than doubled last week with insiders purchasing $99.75 million of their stock compared to $41.55 million in the week prior. Just two transactions accounted for half of the total insider buying as discussed below. Selling declined with insiders selling $432.02 million of stock last week compared to $530.53 million 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 4.33. In other words, insiders sold more than 4 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 12.77. 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. Navistar International Corporation (NAV): $34

We normally don’t report on transactions by 10% owners but decided to make an exception in this case. 10% Owner Carl C. Icahn acquired 1,027,789 shares of this truck and diesel engine manufacturer, paying $33.28 per share for a total amount of $34.21 million.

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