Insider Trading Report Edition 254: Notable Buys And Sales

Welcome to edition 254 of Insider Weekends. Insider buying decreased last week with insiders buying $32.77 million of stock compared to $38.91 million in the week prior. Selling on the other hand increased with insiders selling $1.15 billion  of stock last week compared to $561.54 million 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 35.02. In other words, insiders sold more than 35 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 14.43. 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 1, 2015

Insider Sell Buy Ratio May 1, 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. Sears Holdings Corporation (SHLD): $40.52

10% Owner Bruce R. Berkowitz acquired 158,800 shares of this department stores chain, paying $39.59 per share for a total amount of $6.29 million.

We normally don’t include purchases by 10% owners or funds but decided to make an exception in this case to highlight Bruce Berkowitz’s continued purchases of Sears just as we did back in October 2014. We wrote back then that Mr. Berkowitz’s purchases remind me of Francis Chou’s purchases of Overstock.com (OSTK) back in 2011-2012 when the numbers didn’t look particularly attractive. You can read a profile of Mr. Chou in a Gurufocus.com article titled ‘The Investment Guru That You Never Heard Of‘.

Even as the core operations at Sears continue to deteriorate, Mr. Berkowitz appears to be confident in his investment thesis that the real estate assets of Sears are worth a whole lot more than the market is giving it credit for. He recently mentioned that they have a dedicated analyst solely covering the company and claims that “Sears Holding controls more square footage than any of the nation’s top mall REITs, yet its price, which is much lower by comparison, tells a different story.”

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Disclosure: I hold a long position in Twitter.

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