Insider Trading Report Edition #204: Notable Buys And Sales

Welcome to edition 204 of Insider Weekends. Insiders went on a shopping spree last week with insider buying jumping to a six month high of $223.51 million compared to $65.72 million in the week prior. Selling edged up a wee bit with insiders selling $2.04 billion of stock last week compared to $2.03 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 dropped down to 9.16. In other words, insiders sold more than 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 30.94. 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 16, 2014

Insider Sell Buy Ratio May 16, 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:

A large part of the insider buying was driven by a nearly 3 million share purchase of Microsoft (MSFT) by San Francisco based value oriented fund ValueAct for $116.71 million. Beyond this large purchase and the top 5 listed below, other purchases of note include the well respected Baker Brothers adding to their stake in biotech Seattle Genetics (SGEN) to the tune of $6.46 million, the CEO of CIT Group, John Thain, adding $1.66 million worth of stock to his stake, a cluster purchase by insiders of mobile advertising company Millennial Media (MM) and a cluster purchase by insiders of natural consumer packaged foods company Boulder Brands (BDBD).

1. Scientific Games Corporation (SGMS): $9.5

Shares of this casino and lottery equipment provider were acquired by 4 insiders:

  • Director Ronald O. Perelman acquired 1,750,000 shares, paying $9.25 per share for a total amount of $16.19 million. These shares were acquired indirectly by MacAndrews & Forbes Holdings Inc.
  • President and CEO David L. Kennedy acquired 36,000 shares, paying $8.98 per share for a total amount of $323,280. Mr. Kennedy increased his stake by 32.28% to 147,534 shares with this purchase.
  • Executive VP & CFO Scott D. Schweinfurth acquired 20,000 shares, paying $9.09 per share for a total amount of $181,800.

You can view the list of recent insider transactions for Scientific Games Corporation here.

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