Welcome to edition 568 of Insider Weekends. There were a string of interesting and large insider purchases last week following the broad-based decline in the market early in the week. A number of these purchases were repeat purchases by insiders that have purchased shares in the recent past including Farhad Nanji’s purchase of mortgage company PennyMac (PFSI) discussed below, Mark Klein’s purchase of SuRo Capital (SSSS) and Sardar Biglari’s purchases of Biglari Holdings (BH) through the Lion Fund.
Insider buying increased significantly last week with insiders purchasing $132.61 million of stock purchased compared to $46.32 million in the week prior. Selling remained unchanged at $3.07 billion.
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 23.18. In other words, insiders sold more than 23 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 66.28.
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. PennyMac Financial Services, Inc. (PFSI): $60.25
Director Farhad Nanji acquired 667,979 shares of this mortgage finance company, paying $57.88 per share for a total amount of $38.66 million. These shares were purchased indirectly by MFN Partners, LP.