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Happy New Year and welcome to edition 446 of Insider Weekends. The post-Christmas rally continued on Wall Street with the S&P 500 up 1.86% last week following a 2.86% gain in the prior week. Investors was cheered on last Friday from comments by Fed Chair Powell that indicated they might be patient with their rate hikes following recent tame inflation readings. Obviously several factors can put an end to this nascent rally in the coming weeks including a government shutdown that drags on longer than investors were expecting, further weakening in the housing market, the fed raising rates again and the slowdown in China accelerating. Insider buying was muted last week but that is probably more on account of the quite period before earnings than the rise in the markets over the last two weeks.
Insider buying declined last week with insiders purchasing $29.77 million million of stock compared to $57.27 million in the week prior. Selling on the other hand increased with insiders selling $349.6 million of stock last week compared to $246.43 million 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 11.75. In other words, insiders sold almost 12 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 4.3.
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. Scientific Games Corporation (SGMS): $19.21
Director Ronald O. Perelman acquired 400,000 shares of this gaming company, paying $17.11 per share for a total amount of $6.84 million. These shares were purchased indirectly by MacAndrews & Forbes Incorporated.