by Asif Suria
Insider buying decreased last week with insiders buying $97.23 million of stock compared to $196.76 million in the week prior. Selling also edged down with insiders selling $1.41 billion of stock last week compared to $1.49 billion 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 went up to 14.51. In other words, insiders sold more than 14 times as much stock as they purchased.The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 7.56.
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.
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Insider Sell Buy Ratio February 6, 2015
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. Hess Corporation (HES): $72.97
Chief Executive Officer John B. Hess acquired 57,506 shares of this integrated energy company, paying $69.52 per share for a total amount of $3.99 million. Mr. Hess increased his stake by 3.98% to 1,501,229 shares with this purchase. 28,753 of these shares were acquired indirectly by a family LLC.
It is interesting to see yet another insider purchase by the CEO of an energy company. While Hess’ numbers look very attractive, the decline in oil prices have not yet been factored into these numbers. Hess missed fourth quarter earnings estimates of 28 cents per share but still managed to post a profit of 18 cents a share driven by a 19% decline in revenue. The decline in revenue and earnings would have been even sharper had the company not hedged its exposure to oil prices. As some of those hedges wind down over the next few months, results are likely to get worse before they get better given the company’s exposure to production from North Dakota’s Bakken shale and Ohio’s Utica shale regions.
You can view the list of recent insider transactions for Hess Corporation here.
