Insider Trading Report Edition #235: Notable Buys And Sales

Welcome to edition 235 of Insider Weekends. The prolific buying by insiders of energy companies lost some steam last week even as oil and energy stocks rebounded sharply along with the rest of the market. With the S&P 500 closing less than 5 points off its all-time high, insider buying also picked up with insiders buying $256.35 million of stock compared to $190.94 million in the week prior. Selling along increased sharply with insiders selling $2.59 billion of stock last week compared to $1.34 billion in the week prior.

We saw both Carl Icahn and Mark Rachesky add to their positions in diesel engine and truck manufacturer Navistar International (NAV) and we also saw Carl Icahn add to his stake in car rental company Hertz Global Holdings (HTZ). Hertz has had a tough second half of the year following revelations of accounting irregularities that will require the company to restate its results for the last three years. The stock has stayed weak despite a large $2 million purchase by the CEO in late November.

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 increased to 10.1. In other words, insiders sold 10 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 7.02. 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 19, 2014

Insider Sell Buy Ratio December 19, 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. American Homes 4 Rent (AMH): $17.31

Director B. Wayne Hughes acquired 1,000,000 shares of this real estate investment trust, paying $16.99 per share for a total amount of $16.99 million. These shares were purchased indirectly through trust.

Mr. Hughes is the billionaire founder of Public Storage (PSA) and retired as the CEO of PSA in 2012. He founded the former manager of American Homes 4 Rent in 2011.

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Disclosure: None.

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Comments

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Susan Miller 4 years ago Member's comment

When is GHC gonna split? Ridiculous! VRTX wasn't an insider purchase btw. Thanks for a great article.

Asif Suria 4 years ago Author's comment

Thank you for your kind words. The insiders of VRTX were selling and hence it was in the "Notable Insider Sales" section.