Insider Trading Report Edition #236: Notable Buys And Sales

Welcome to edition 236 and the last edition of Insider Weekends for 2014. We have been publishing these posts continuously for over 4.5 years and it has been a great learning experience. While insiders as a group have outperformed the market more often than not, they are also often early and sometimes completely wrong. One key advantage we have found of following this strategy is that it brings companies to our attention that would have otherwise not been on our radar. We hope this this information has been useful to you and are planning on launching an updated version of the site in 2015 that will add additional features and expand the scope of the data we provide.

Insider buying declined sharply with insiders buying $83.07 million of stock in this holiday-shortened week compared to $256.35 million in the week prior. Selling also declined with insiders selling $628.05 million of stock last week compared to $2.59 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 to 7.56. In other words, insiders sold more than 7 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 10.1. 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 December 26, 2014

Insider Sell Buy Ratio December 26, 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:

1. Biglari Holdings Inc. (BH): $389.97

Chairman and CEO Sardar Biglari, acquired 5,249 shares of this restaurant holding company, paying $366.76 per share for a total amount of $1.93 million. These shares were acquired indirectly through The Lion Fund.

Biglari Holdings has had a tough year with the stock down 17% year-to-date despite (noncontrolled) holding companies such as Cracker Barrel (CBRL) posting a gain of 26% this year. Biglari Holdings has a nearly 20% stake in Cracker Barrel through the Lion Fund.

We have written about Biglari Holdings several times in the past including back in March 2014 when we wrote,

“Activist hedge fund manager Sardar Biglari has used Biglari Holding to either acquire entire companies like the Steak n Shake restaurant chain or activist positions in companies like Cracker Barrel (CBRL). The Restaurant Investor is a very interesting profile of Sardar Biglari written by Max Olson, the CEO of Max Capital.”

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Disclosure:  I hold a long position in TWTR.

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