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Welcome to edition 315 of Insider Weekends and a happy fourth of July weekend to all of you. I just got back from a trip to Hawaii and the island of Oahu was absolutely stunning. Given below are a couple of pictures of Hanauma Bay on the island of Oahu where I tried snorkeling for the first time and spotted Hawaii’s national fish called the Humuhumunukunukuapua’a (try pronouncing that one).
Getting back to the investing, Insider buying decreased by half last week with insiders buying $53.24 million of stock compared to $124.52 million in the week prior. Selling increased with insiders selling $984.67 million of stock last week compared to $462.5 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 increased to 18.49. In other words, insiders sold more than 18 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 3.71. 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.