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Happy Holidays and welcome to edition 340 of Insider Weekends. Insider buying increased last week with insiders buying $131.59 million of stock compared to $64.58 million in the week prior. Selling on the other hand declined significantly with insiders selling $731.32 million of stock last week compared to $1.68 billion in the week prior. More than half the insider buying last week was on account of Director Jeffrey Ubben of activist value-oriented fund ValueAct Capital buying $83.34 million worth of Twenty-First Century Fox (FOX). Beyond this purchase, pickings were slim on the buy side as we approach the end of the quarter.
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 to 5.56. In other words, insiders sold more than 5 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 25.99. 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. Newcastle Investment Corp. (NCT): $4.31
Director Wesley R. Edens acquired 1,000,000 shares of this mortgage REIT, paying $4.37 per share for a total amount of $4.37 million. These shares were purchased indirectly through a trust.