Welcome to edition 541 of Insider Weekends. Insider buying edged up a wee bit last week with insiders purchasing $133.12 million of stock compared to $132.96 million in the week prior. Selling increased significantly with insiders selling $5.61 billion of stock last week compared to $1.17 billion in the week prior. A majority of the selling was by Jeff Bezos and other insiders of Amazon.com.
The other large sale last week was a $405.21 million share sale of Caravan (CVNA) by 10% owner Ernest C. Garcia II. The innovative used car sales company has seen its shares rise sharply with the stock up more than 165% over the last year. With an estimated net worth north of $5 billion, Mr. Garcia is Carvana’s largest shareholder and is the father of Carvana’s CEO Ernest Garcia III. He is also the owner of the fourth largest used car company DriveTime Automotive and was featured in the Forbes article titled How An Ex-Con Became A Billionaire From Used Cars.
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 42.12. In other words, insiders sold more than 42 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 8.82.
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. American Assets Trust, Inc. (AAT): $20.96
Chairman, CEO & President Ernest S. Rady acquired 305,739 shares of this diversified REIT, paying $21.58 per share for a total amount of $6.59 million. These shares were purchased indirectly by American Assets, Inc.