Welcome to edition 266 of Insider Weekends. Insider buying increased significantly last week with insiders buying $182.33 million of stock compared to $6.83 million in the week prior. Selling on the other hand decreased with insiders selling $472.75 million of stock last week compared to $522.48 million in the week prior.
Most of the insider buying was driven by three noted investors adding to their existing positions. David Einhorn of Greenlight Capital increased his stake in natural gas and coal company Consol Energy (CNX) to the tune of $113.69 million, Mark Rachesky picked up 800,000 shares of diesel truck engine manufacturer Navistar International (NAV) and Bruce Berkowitz of Fairholme Capital once again increased his position in Sears Holdings (SHLD). Mr. Berkowitz sold 251,400 shares from a managed client account based on instructions from the client and purchased 250,000 shares for his fund. Sears Holdings continues its roller coaster ride with the stock down nearly 44% over the last three months, erasing all the gains from a big rally earlier this year and then some.
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 2.59. In other words, insiders sold almost 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 76.51. 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 July 25, 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.
