Welcome to edition 206 of Insider Weekends. Insider buying declined for a second week with insiders buying $26.37 million of stock compared to $73.08 million in the week prior. Selling on the other hand doubled with insiders selling $3.04 billion of stock last week compared to $1.51 billion in the week prior. A large part of the selling was related to selling by shareholders of HCA Holdings (HCA) through a secondary offering and by selling their shares to the company.
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 115.19. In other words, insiders sold more than 115 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 20.69. 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 May 30, 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:
1. Dick’s Sporting Goods Inc. (DKS): $44.45
Shares of this sporting goods retailer were acquired by 3 insiders:
- Chairman and Chief Executive Officer Edward W. Stack acquired 115,000 shares, paying $42.56 per share for a total amount of $4.89 million. Mr. Stack increased his stake by 1.03% to 11,324,088 shares with this purchase.
- Director Larry D. Stone acquired 23,000 shares, paying $42.46 per share for a total amount of $976,684. These shares were acquired indirectly through a trust.
- EVP-Finance, Admin & CFO Andre J. Hawaux acquired 2,300 shares, paying $42.82 per share for a total amount of $98,486. Mr. Hawaux increased his stake by 4.08% to 58,653 shares with this purchase.
The timing of this purchase was interesting as it follows a drop in the stock after the company reported disappointing first quarter earnings and lowered its full year forecast. The stock was trading at a two year low at the time of these insider purchases. In contrast, competitor Cabela’s (CAB) is up more than 73% over the last two years as you can see from this chart.
