Insider Weekends - Edition 316

Insider buying decreased last week with insiders buying $44.58 million of stock compared to $53.24 million in the week prior. Selling also declined sharply with insiders selling $422.31 million of stock last week compared to $984.67 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 decreased to 9.69. In other words, insiders sold  almost 10 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 18.49. 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 8, 2016

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. Essent Group Ltd. (ESNT): $22.65

Director Andrew Turnbull acquired 36,353 shares of this mortgage insurance company, paying $21.33 per share for a total amount of $775,409. Mr. Turnbull increased his stake by 269.06% to 49,864 shares with this purchase.

You can view the list of recent insider transactions for Essent Group Ltd. here.

P/E: 12.18 Forward P/E: 8.75 Industry P/E: 6.05
P/S: 5.4 Price/Book: 1.72 EV/EBITDA: 8.03
Market Cap: $2.11B Avg. Daily Volume: 436,362 52 Week Range: $16.49 – $29.67

2. Liberty Tax, Inc. (TAX): $13.47

Director Robert M. Howard acquired 20,200 shares of this tax preparation services provider, paying $13.07 per share for a total amount of $264,092. Mr. Howard increased his stake by 67.79% to 50,000 shares with this purchase.

With most U.S. indexes at or close to all time highs, it is hard to find stocks that trade at an attractive valuation. Even if you stumble across some that appear cheap, they are cheap for a reason. In other words, they are more likely to be value traps than attractive investments.

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Disclosure: Clients of Signal Partners, LLC  and I may have positions in ...

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