Insider Weekends-November 22, 2015

Insider buying decreased last week with insiders buying $132.46 million of stock compared to $193.44 million in the week prior. Selling also decreased with insiders selling $2.15 billion of stock last week compared to $2.88 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 went up to 16.24. In other words, insiders sold more than 16 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 14.87. 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 November 20, 2015

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. Southern Copper Corp. (SCCO): $27.34

Chairman of the Board German Larrea Velasco acquired 271,000 shares of this copper mining company, paying $26.36 per share for a total amount of $7.14 million. Mr. Velasco increased his stake by 11.96% to 2,536,567 shares with this purchase.

This is the fourth time in the last three months we have reported on large insider purchases by Mr. Mota-Velasco. We wrote the following about the company last month after one of his purchases,

“With copper prices close to a six year low, Mr. Mota-Velasco has purchased large quantities of Southern Copper stock over the last year. This Mexican mining mogul has obviously been early in expecting an end to this commodities bear market. Considering he has been the Chairman of the company since 1999, he has probably seen the behavior of commodity prices over several business cycles.

Despite low copper prices, the company remains solidly profitable and its balance sheet is not as leveraged as some of its peers.”

You can view the list of recent insider transactions for Southern Copper Corp. here.

P/E: 21.46 Forward P/E: 20.1 Industry P/E: 14.65
P/S: 3.99 Price/Book: 3.81 EV/EBITDA: 11.28
Market Cap: $21.47B Avg. Daily Volume: 1,830,400 52 Week Range: $23.41 – $33.31

2. SolarCity Corporation (SCTY): $29.04

Chairman of the Board and 10% owner Elon Musk acquired 198,615 shares of this solar systems installer, paying $26.45 per share for a total amount of $5.25 million. These shares were purchased indirectly through a trust.

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Disclosure: None.

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