Insider Weekends - Edition 322

Insider buying increased last week with insiders buying $177.89 million of stock compared to $100.55 million in the week prior. Selling also increased with insiders selling $3.01 billion of stock last week compared to $1.91 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 16.94. In other words, insiders sold  17 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 19.04. 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 19, 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. Medpace Holdings, Inc. (MEDP): $28.53

Shares of this scientifically-driven outsourced clinical development services provider were acquired by 2 insiders:

  • President & CEO August J. Troendle acquired 879,565 shares, paying $23.06 per share for a total amount of $20.28 million. Mr. Troendle increased his stake by 257.29% to 1,221,416 shares with this purchase. 869,565 of these shares were purchased during the IPO and 10,000 shares were purchased indirectly for Mr. Troendle’s son.
  • Sr. Vice President, Operations Susan E. Burwig acquired 19,211 shares, paying $29.21 per share for a total amount of $561,082.

Medpace priced at the higher end of its IPO range of $20 to $23 on August 11th and was up over 30% from its IPO price over the next three days before settling down for a gain of 24% through the end of last week. The 10,000 shares purchase Dr. Troendle made for his son was at $27.98/share, well above the IPO price.

Dr. Troendle founded Medpace in 1992 and it is interesting that the company is going public 24 years later with the founder still at the helm. For a company that is no longer a spring chicken, revenue for the first six months of 2016 grew over 20% when compared to the same period last year. You can read the full S-1 filing here.

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

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