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Welcome to edition 403 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $420.25 million of stock compared to $152.83 million in the week prior. Selling also increased with insiders selling $3.05 billion of stock last week compared to $2.14 billion in the week prior. A large part of the insider buying last week was driven by 10% owner Bill Gates adding to his stake in Ecolab (ECL) to the tune of $177 million indirectly through his investment company Cascade Investments, LLC.
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 7.25. In other words, insiders sold more than 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 14.02.
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. Transocean Ltd. (RIG): $9.58
Director Frederik Wilhelm Mohn acquired 2,000,000 shares of this offshore contract drilling services provider for oil and gas wells, paying $9.29 per share for a total amount of $18.58 million. These shares were purchased indirectly by Perestroika, a company solely owned by Mr. Mohn.