Insider Trading Report Edition 292: Notable Buys And Sales

Welcome to edition 292 of Insider Weekends. Insider buying declined last week with insiders buying $56.58 million of stock compared to $66.27 million in the week prior. Selling also decreased with insiders selling $112.27 million of stock last week compared to $212.11 million in the week prior.

This is lowest level of insider sales we have seen in over four years. The market rebounded last week with the S&P 500 managing to eek out a gain of 1.41% for the week. An 8% bounce in the price of brent crude combined with 6.8% growth in the Chinese economy triggered a rally in stocks. While the 6.8% growth rate was a hair’s breadth below forecasts, the Chinese economy is still growing and at a rate that is more than three times that of most developed economies.

Volatility as measured by the VIX index also came down and as a friend pointed out yesterday, it did not hit the 40 level we saw last summer. In other words, fear did not permeate investors as it did last summer. Beyond the headline numbers, it is noteworthy that small caps as defined by the Russell 2000 index (IWM) are already in a bear market and so are certain sectors. Markets are known to turn on a dime and this rebound we saw could very well mark the end of the recent correction but I would be pleasantly surprised if that were the case.

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 dropped to 1.98. In other words, insiders sold almost 2 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 3.32. 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.

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. Wynn Resorts Ltd. (WYNN): $59.17

Chief Executive Officer Stephen A. Wynn acquired 572,850 shares of this resorts & casinos operator, paying $55.62 per share for a total amount of $31.86 million. These shares were purchased indirectly by Wynn Family Limited Partnership.