Welcome to edition 195 of Insider Weekends. Insider buying declined sharply last week with insiders purchasing $37.85 million of their stock compared to $81.57 million in the week prior. Selling increased with insiders selling $2.62 billion of stock last week compared to $2.6 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 jumped to 69.3. In other words, insiders sold more than 69 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 31.88.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.
Insider Sell Buy Ratio March 14, 2014
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:
Some of the insider purchases that did not make the top 5 list but are worth exploring include additional purchases by a director of Liquidity Services  (LQDT),  a 100,000 share purchase by the CFO of Radioshack (RSH) and additional purchases by a director of textbook rental company Chegg (CHGG).
1. Office Depot, Inc. (ODP): $4.56
Shares of this office products retail chain were acquired by 5 insiders:
- Director Jeffrey C. Smith acquired 2,873,913 shares, paying $4.59 per share for a total amount of $13.2 million. These shares were acquired indirectly through the Starboard Value and Opportunity fund and managed accounts.
- Chairman & CEO Roland Smith acquired 50,000 shares, paying $4.61 per share for a total amount of $230,645. Mr. Smith increased his stake by 4.17% to 1,249,616 shares with this purchase.
- Director Joseph Vassalluzzo acquired 15,000 shares, paying $4.58 per share for a total amount of $68,700. Mr. Vassalluzzo increased his stake by 33.31% to 60,034 shares with this purchase.
- Director Nigel Travis acquired 10,870 shares, paying $4.61 per share for a total amount of $50,097. Mr. Travis increased his stake by 7.31% to 159,584 shares with this purchase.
- Director Warren F. Bryant acquired 6,000 shares, paying $4.66 per share for a total amount of $27,953. Mr. Bryant increased his stake by 2.82% to 218,831 shares with this purchase.
Despite its merger with OfficeMax last year, Office Depot continues to face headwinds in an industry dominated by Amazon.com. Whether this purchase signals a bottom and a potential turnaround or the company remains a value trap remains to be seen. Investor might be encouraged to see the activist hedge fund Starboard Value increase its stake in the company.
