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Insider Weekends: Insider Selling Eclipses $3 Billion

  • April 18, 2021

Welcome to edition 564 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $141.21 million of stock purchased compared to $44.09 million in the week prior. Such a large spike in insider buying during an earnings related quiet period seems unusual and I found that a large portion of the buying was related to a privately negotiated $113.18 million purchase between electric utility Evergy (EVRG) and C. John Wilder’s Bluescape Energy Partners. Removing this transaction drops the insider buying to just a gaggle of uninteresting purchases that total less than $28 million.

The quiet period did not discourage insiders from selling and selling increased to $3.16 billion compared to $1.98 billion in the week prior. With the P/E of the S&P 500 at nearly 47 (as of 4/9/2021 according to WSJ) and the S&P 500 at a new record high, it is not surprising to see that the pace of insider selling has been elevated the last few weeks.

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 22.37. In other words, insiders sold more than 22 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 44.99.

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. Landec Corporation (LNDC): $11.2

Shares of this packaged foods company were acquired by 3 insiders:

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