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Welcome to edition 405 of Insider Weekends. Insider buying declined significantly last week with insiders purchasing $75.46 million of stock compared to $203.25 million in the week prior. In a week that saw the S&P 500 decline almost 6%, insiders stepped up their selling with $3.24 billion of stock sold compared to $2.65 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 went up to 42.98. In other words, insiders sold almost 43 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 13.02.
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. La Jolla Pharmaceutical Company (LJPC): $28.45
Director Kevin C. Tang acquired 508,474 shares of this biopharmaceutical company, paying $29.50 per share for a total amount of $14.99 million. These shares were purchased indirectly by Tang Capital Partners, LP.