Insider Weekends – January 10, 2016

In a week that marked the worst start to a year in the history of the S&P 500, insiders stepped up their purchases significantly, buying $132.61 million of stock compared to $42.25 million in the week prior. Selling also increased with insiders selling $439.57 million of stock last week compared to $359.11 million in the week prior.

With the energy and commodities sector hit the worst, we were not surprised to see a lot of insider purchases in energy companies and companies that provide infrastructure services to the energy sector. We expect to see a larger spike in insider buying once the earnings related quiet period ends in a couple of weeks.

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 3.31. In other words, insiders sold more than 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 8.49. 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 January 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. Enterprise Products Partners L.P. (EPD): $24.25

Director Randa Duncan Williams acquired 3,830,256 shares of this independent oil & gas company, paying $26.11 per share for a total amount of $100 million. These shares were purchased indirectly through various trusts.

You can view the list of recent insider transactions for Enterprise Products Partners L.P. here.

P/E: 19.25 Forward P/E: 16.96 Industry P/E: 9.22
P/S: 1.56 Price/Book: 2.4 EV/EBITDA: 14.71
Market Cap: $48.64B Avg. Daily Volume: 6,388,680 52 Week Range: $20.76 – $36.2
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Disclosure: Clients of Signal Partners, LLC  and I may have positions in ...

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