Insider Weekends – Two Insiders of Prospect Capital Continue Buying

Welcome to edition 393 of Insider Weekends and the last update for this year. What an amazing year this was for investors. We saw the S&P 500 increase 19.42% for the year without a single monthly drop much to the delight of traders who sold protection or sold volatility short. For some of us that purchased insurance on portfolios in the form of S&P 500 put options, while the premium was low, it took a bite out of performance. This year was not just kind to US investors but a global rally saw every major market in Europe, Asia and Latin America end up in the green. With tax reform providing relief to most tax payers and especially corporations, many strategists are seeing strong growth and earnings in the year ahead. It remains to be seen how much of this is baked into the market and how much propels this aging bull market to new highs.

With the normal slowdown we see at the end of each quarter, insider buying declined last week with insiders purchasing $28.43 million of stock compared to $85.3 million in the week prior. Selling also declined sharply with insiders selling $314.96 million of stock last week compared to $1.37 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 11.08. In other words, insiders sold more than 11 times as much stock as they purchased. The Sell/Buy ratio this week compares favourably with the prior week, when the ratio stood at 16.03.

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. Prospect Capital Corporation (PSEC): $6.74

Shares of this business development company were acquired by 2 insiders:

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