Welcome to edition 258 of Insider Weekends. Insider buying decreased last week with insiders buying $43.19 million of stock compared to $86.26 million in the week prior. Selling also decreased with insiders selling $2.08 billion of stock last week compared to $3.19 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 48.14. In other words, insiders sold more than 48 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 36.93. 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 29, 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. First Foundation Inc. (FFWM): $18.84
Shares of this regional bank were acquired by 2 insiders:
- President FFB David S. Depillo acquired 272,035 shares, paying $18.38 per share for a total amount of $5 million. These shares were purchased indirectly through a trust.
- Director Warren D. Fix acquired 1,000 shares, paying $18.92 per share for a total amount of $18,920. These shares were purchased indirectly through a trust.
We are all used to seeing companies offer lucrative pay packages to key new employees that include generous stock grants but the agreement between Mr. Depillo and First Foundation is unusual to say the least. Mr. Depillo joined the company earlier this month as President of First Foundation Bank following a one-year stint at Oregon based regional bank Umpqua Holdings (UMPQ). As you can see from this 8-K filing, he received the usual base salary, participation in an incentive plan and restricted stock units (RSUs).
The unusual part is that according to a press release issued by the company yesterday, “it has sold a total of 272,035 shares of its common stock, at a price of $18.38 per share in cash, to David S. DePillo as an inducement to him to join the Company as President of First Foundation Bank, the Company’s wholly-owned banking subsidiary.â€
