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Welcome to edition 371 of Insider Weekends. With Q2 earnings season in full swing, we finally saw an uptick in insider buying with insiders purchasing $94.97 million of stock compared to $15.01 million in the week prior. Selling on the other hand decreased with insiders selling $651.35 million of stock last week compared to $1.28 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 to 6.86. In other words, insiders sold almost 7 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 85.25.
I was hiking through the Purisima Creek Redwoods Preserve this weekend while listening to a Masters in Business podcast where Barry Ritholtz interviews Rich Barton, the cofounder of Expedia (EXPE), Zillow (Z) and Glassdoor. The interview was as absorbing as the ones I mentioned last week and it was interesting to hear Mr. Barton bring up Jay Hoag, the founding general partner at venture capital firm TCV. Mr. Hoag’s track record of purchasing Netflix (NFLX) and Zillow (Z) in the public market has been excellent. You can read more about his purchases of both these companies in the February 26, 2016 edition of Insider Weekends.
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. Lands End, Inc. (LE): $13.25
10% Owner Edward S. Lampert acquired 1,783,024 shares of this apparel retailer, paying $13.39 per share for a total amount of $23.87 million.