Welcome to edition 464 of Insider Weekends. Insider buying nearly doubled last week with insiders purchasing $109.5 million million of stock compared to $57.84 million in the week prior. Selling also increased with insiders selling $1.26 billion of stock last week compared to $1.17 billion in the week prior. A large part of the increase in insider buying was on account of Elon Musk buying $25 million worth of Tesla (TSLA) stock as seen by the bright green rectangle in the heat map below. However this purchase was as a result of his participating in the company’s latest secondary offering and not an open market purchase. We focus on open market purchases for the list of notable insider purchases each week and hence the Tesla purchase is not on the list this week.
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 11.51. In other words, insiders sold almost 12 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 20.3.
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. MGM Resorts International (MGM): $25.63
Director Paul J. Salem acquired 800,000 shares of this casino operator, paying $25.40 per share for a total amount of $20.32 million.