Welcome to edition 398 of Insider Weekends. Insider buying almost doubled last week with insiders purchasing $47.89 million of stock compared to $24.96 million in the week prior. Selling also increased with insiders selling $1.03 billion of stock last week compared to $916.91 million in the week prior.
In our last post we discussed that the S&P 500 had gained 7.45% in the span of the first four weeks of 2018 after gaining over 21% in 2017. The market gave back some of those gains last week with the S&P 500 retreating 3.85% for the week along with a global sell off in equities. The 666 point drop in the Dow on Friday was reminiscent of the big drops we saw in late 2008 and early 2009 but with some differences. In percentage terms, this drop was much smaller and the financial sector and the economy are not in the kind of situation we were in in late 2018. We could be at the cusp of a healthy pull back and I have personally increased my hedges and plan to rebalance my portfolio by reducing my equity exposure.
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 21.48. In other words, insiders sold more than 21 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 36.73.
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. Revolution Lighting Technologies, Inc. (RVLT): $4.37
Shares of this LED lighting solutions manufacturer were acquired by 2 insiders: