Insider Weekends - Edition 317

As we enter the thick of earnings season, insider buying decreased significantly last week with insiders buying $6.38 million of stock compared to $44.58 million in the week prior. Selling on the other hand increased with insiders selling $578.34 million of stock last week compared to $422.31 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 increased to 90.65. In other words, insiders sold  almost 91 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 9.69. We have not seen such a big increase in the buy/sell ratio since September 12, 2014 when the ratio spiked to 95.05. The S&P 500 went on to lose over 6% over the next five weeks. If it is any consolation, the S&P 500 erased those losses and went on to hit new highs less than two weeks later. 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 15, 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. Ryman Hospitality Properties, Inc. (RHP): $53.78

Chairman & CEO Colin V. Reed acquired 7,377 shares of this hotel operator, paying $53.44 per share for a total amount of $394,259. Mr. Reed increased his stake by 0.73% to 1,022,861 shares with this purchase.

Ryman’s 5.58% dividend yield is noteworthy in this low interest rate environment, especially considering the average yield of equity REITs is currently 3.65% according to NAREIT.

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

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