Welcome to edition 579 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $247.78 million of stock purchased compared to $60.2 million in the week prior. Selling also increased significantly to $3.85 billion compared to $1.49 billion in the week prior.
Coming off an earnings related quiet period, we were expecting a rebound in insider transactions but this pace of buying was surprising. Several companies where we have seen insider buying in the past, saw insiders buy again last week. Vertex Pharmaceuticals (VRTX) and American Assets Trust (AAT) both made the top 5 list last week and we also saw insider buying by the CEO of B. Riley Financial (RILY) but the size of his purchases were not large enough to make our list. Two of these three stocks have done very well since insiders starting buying.
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 14.07 In other words, insiders sold more than 14 times as much stock as they purchased. The Sell/Buy ratio this week was favorable compared to the prior week when the ratio stood at 24.79.
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. Sun Communities, Inc. (SUI): $196.26
Chairman & CEO Gary A. Shiffman acquired 234,934 shares of this residential REIT, paying $194.20 per share for a total amount of $45.62 million. Mr. Shiffman increased his stake by 29.03% to 1,044,184 shares with this purchase.