Insider Weekends – Edition 359 – Insiders Of Two Retail REITs Buy Stock

Welcome to edition 359 of Insider Weekends. Insider buying decreased with insiders buying $106.38 million of stock compared to $318.69 million in the week prior. Selling increased more than tenfold with insiders selling $4.63 billion of stock last week compared to $400.52 million in the week prior.

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 spiked to 43.28. In other words, insiders sold more than 43 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 1.26.

Insider Sell Buy Ratio May 5, 2017

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. Carvana Co. (CVNA): $10.92

Shares of this e-commerce platform for buying used cars were acquired by 4 insiders:

• 10% Owner Ernest C. Garcia II acquired 1,664,517 shares, paying $12.9 per share for a total amount of $21.48 million.
• Chief Executive Officer Ernest C. Garcia III acquired 183,333 shares, paying $13.35 per share for a total amount of $2.45 million.
• Chief Brand Officer Ryan S. Keeton acquired 6,000 shares, paying $9.25 per share for a total amount of $55,500.
• Controller John T. McKeon acquired 181 shares, paying $10.93 per share for a total amount of $1,978.

Carvana went public on April 28th at a price of $15 and some of these insider purchases were related to purchases in the IPO. We normally tend not to feature IPO related purchases but decided to make an exception in this case. The IPO was not very well received and the stock dropped as low as $8.14 on May 4th. All of these insiders also purchased shares on the open market after the stock had dropped a lot. As investors in TrueCar (TRUE) have realized, getting in early in some of these businesses can translate into a lucrative but also a very volatile ride.

You can view the list of recent insider transactions for Carvana Co. here.

2. Biogen Inc. (BIIB): $262.15

Shares of this biotech company were acquired by 2 insiders:

• Director Alexander J. Denner acquired 73,858 shares, paying $278.50 per share for a total amount of $20.57 million. These shares were acquired indirectly through a fund.
• Chief Executive Officer Michel Vounatsos acquired 1,402 shares, paying $271.35 per share for a total amount of $380,433. Mr. Vounatsos increased his stake by 91.93% to 2,927 shares with this purchase.