Welcome to edition 215 of Insider Weekends. Insider buying declined last week with insiders buying $60.16 million of stock compared to $88.99 million in the week prior. Selling on the other hand more than doubled with insiders selling $1.34 billion of stock last week compared to $549.37 million in the week prior. It was interesting to see this increase in insider selling against the backdrop of a 2.7% decline in the S&P 500, its biggest single week decline since 2012.
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 22.36. In other words, insiders sold more than 22 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 6.17 We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.
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:
There were some interesting purchases on the buy side this week that included purchases by insiders in two companies I have held in my portfolio for several months as mentioned in the top 5 insider purchases below. Beyond these top 5 purchases, other purchases worth exploring include a cluster of insider purchases at regional bank Berkshire Hills Bancorp (BHBL), a 20,000 share purchase for nearly half a million dollars by the CEO of diagnostic testing company Quidel (QDEL), a 9,000 share purchase by the COO of the marine transportation services provider to the offshore drilling industry Gulfmark Offshore (GLF) and purchases by two insiders of Orchid Paper Products (TIS).