Insider Weekends - Edition 321

Insider buying increased last week with insiders buying $100.55 million of stock compared to $78.59 million in the week prior. Selling declined with insiders selling $1.91 billion of stock last week compared to $2.12 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 decreased to 19.04. In other words, insiders sold  more than 19 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 26.92. 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 August 12, 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. Netflix, Inc. (NFLX): $96.59

Director Jay C. Hoag acquired 300,000 shares of Netflix, paying $94.31 per share for a total amount of $28.29 million. These shares were purchased indirectly through various Technology Crossover Ventures (TCV) funds.

We normally exclude transactions by funds and venture capital firms but decided to make an exception just liked we did two weeks ago because of Mr. Hoag’s history of insider purchases. We wrote the following after his earlier purchases of Netflix,

TCV is a well known venture capital company that mostly invests in private companies but sometimes ventures into public markets. The company first invested in Netflix (NFLX) back in 1999 and Mr. Hoag’s purchase of Netflix shares in May 2012 at prices in the low $70′s (pre-split) were one of the best instances of insider purchases I have seen since I started tracking this data more than 5 years ago. Netflix shares had dropped dramatically before Mr. Hoag’s purchases on news that the company was going to split itself a DVD mailing service called Qwikster and a streaming service. Much to the relief of investors, the company eventually abandoned that plan and the stock eventually went up 10 fold. Unfortunately for TCV, they did not hold through that entire 1,000%+ increase.

We also reported on Mr. Hoag’s purchases of Zillow (Z) earlier this year on behalf of TCV at an average price of $19.98. The stock has almost doubled since his purchase five months ago.”

You can view the list of recent insider transactions for Netflix, Inc. here.

P/E: 301.84 Forward P/E: 108.53 Industry P/E: 36.96
P/S: 5.39 Price/Book: 17.02 EV/EBITDA: 133.67
Market Cap: $41.41B Avg. Daily Volume: 12,376,200 52 Week Range: $79.95 – $133.27
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Disclosure: Clients of Signal Partners, LLC  and I may have positions in ...

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