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Welcome to edition twenty three of Insider Weekends. Insider buying increased last week with insiders purchasing $45.16 million of their stock when compared to $32.8 million in the week prior. Selling on the other hand decreased with insiders selling $2.71 billion worth of stock when compared to $3.29 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 buying in that week. The adjusted ratio for last week went down to 60. In other words, insiders sold 60 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 100. 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 12, 2010

Insider Sell Buy Ratio November 12, 2010

Note: As mentioned in the first post in this series Introduction to Insider Weekends, 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. The Coca-Cola Company (KO): $62.92

Director Barry Diller acquired 270,000 shares of this beverage – soft drinks company, paying $62.59 per share for a total amount of $1.7 million. Mr Diller increased his stake by 23.87% to 1,401,000 shares with this purchase.

P/E: 19.36 Forward P/E: 16.39 Industry P/E: N/A
P/S: 4.54 Price/Book: 5.21 EV/EBITDA: 13.71
Market Cap: $146.10B Avg. Daily Volume: 8,690,930 52 Week Range: $49.47 – $62.96

2. Bank of America Corporation (BAC): $12.12

Shares of this financial holding company were purchased by two insiders:

  • Director Robert Scully acquired 39,500 shares, paying $12.45 per share for a total amount of $491,716. This was the first purchase of Mr. Scully through a trust. He also owns 77,655 shares directly.
  • Director Charles O Holliday Jr acquired 30,000 shares, paying $12.61 per share for a total amount of $378,150. Mr Holliday increased his stake by 121.70% to 54,650 shares with this purchase.
P/E: N/A Forward P/E: 8.3 Industry P/E: N/A
P/S: 1.57 Price/Book: 0.58 EV/EBITDA: N/A
Market Cap: $122.23B Avg. Daily Volume: 194,835,000 52 Week Range: $11.03 – $19.86

3. Digital Realty Trust Inc. (DLR): $54.13

Director Laurence Chapman acquired 15,000 shares of this real estate investment trust (REIT), paying $54.59 per share for a total amount of $818,850. This San Francisco based REIT focuses on data centers, technology infrastructure and leasing office space to technology companies. The dividend yield is 3.9%.

This is the second insider purchase this year amid a sea of insider sales. Mr. Chapman increased his stake by 36.62% to 55,964 shares with this purchase.

P/E: 93.81 Forward P/E: 14.13 Industry P/E: N/A
P/S: 6.06 Price/Book: 3.47 EV/EBITDA: 17.37
Market Cap: $4.84B Avg. Daily Volume: 1,260,270 52 Week Range: $46.04 – $64.17

4. Cabela’s Inc. (CAB): $22.33

Director Reuben Mark acquired 30,000 shares of this specialty retailer of sporting goods, paying $22.96 per share for a total amount of $688,700. Mr. Mark is the only insider buying shares and purchased shares multiple times in May and June. He increased his stake by 3.13% to 988,800 shares with this purchase.

The stock was up more than 20% last week following Q3 results. While gross margins expanded recently, single digit profits margins combined with a lot of debt makes the company less attractive at these levels.

P/E: 24.54 Forward P/E: 12.2 Industry P/E: N/A
P/S: 0.59 Price/Book: 1.62 EV/EBITDA: 16.4
Market Cap: $1.52B Avg. Daily Volume: 461,874 52 Week Range: $11.65 – $23.33

5. Chimera Investment Corporation (CIM): $4.05

Shares of this real estate investment trust (REIT) were acquired by two insiders:

  1. Director Paul Donlin acquired 100,000, paying $3.85 per share for a total amount of $385,000. Mr. Donlin increased his stake by 35.84% to 379,015 shares with this purchase.
  2. CEO, President and Director Matthew Lambiase acquired 50,000 shares, paying $4.00 per share for a total amount of $200,000. Mr. Lambiase increased his stake by 35.84% to 379,015 shares with this purchase.

There has been nothing but insider buying at this mortgage REIT that yields nearly 18%. However the stock has mostly been stuck between $3.40 and $3.80 this year, breaking out to the upside in the last three months.

P/E: 6.42 Forward P/E: 5.62 Industry P/E: N/A
P/S: 6.82 Price/Book: 1.21 EV/EBITDA: N/A
Market Cap: $3.58B Avg. Daily Volume: 15,858,100 52 Week Range: $3.5 – $4.36

Notable Insider Sales:

1. Brookdale Senior Living Inc. (BKD): $19.05

Shares of this long – term care facility were sold by four insiders:

  • Director Wesley Edens sold 11 million shares for $18.76 per share, generating a total amount of $207.12 million
  • 10% owner Robert Kauffman sold 979,688 shares for $18.76 per share, generating a total amount of $18.38 million
  • 10% owner Randal Nardone sold 979,688 shares for $18.76 per share, generating a total amount of $18.38 million
  • Director Mark Schulte sold 2,500 shares for $20.20 per share, generating a total amount of $50,507
P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 1.06 Price/Book: 2.16 EV/EBITDA: 13.04
Market Cap: $2.29B Avg. Daily Volume: 948,926 52 Week Range: $12.66 – $22.21

2. Oracle Corp. (ORCL): $28.32

Chief Executive Officer Larry Ellison sold 5 million shares of this enterprise software company for $28.65 per share, generating a total amount of $143.23 million.

P/E: 22.6 Forward P/E: 12.93 Industry P/E: N/A
P/S: 4.91 Price/Book: 4.47 EV/EBITDA: 11.83
Market Cap: $142.37B Avg. Daily Volume: 37,092,100 52 Week Range: $21.24 – $29.82

3. Microsoft Corporation (MSFT): $26.27

Shares of this application software company were sold by two insiders:

  • Director Bill Gates sold 8 million shares for $26.95 per share, generating a total amount of $215.56 million
  • President, Windows Division Steven Sinofsky sold 200,000 shares for $27.14 per share, generating a total amount of $5.43 million. This sale was as a result of exercising options immediately prior to the sale.
P/E: 11.29 Forward P/E: 9.8 Industry P/E: N/A
P/S: 3.47 Price/Book: 4.87 EV/EBITDA: 6.59
Market Cap: $224.75B Avg. Daily Volume: 61,243,200 52 Week Range: $22.73 – $31.58

4. Stoneridge Inc. (SRI): $12.71

Shares of this auto parts company were sold by two insiders:

  • 10% owner Cecile Draime sold 5.65 million shares for $10.21 per share, generating a total amount of $57.7 million
  • Director Jefrey Draime sold 1.07 million shares for $10.21 per share, generating a total amount of $10.91 million
P/E: 49.84 Forward P/E: 10.42 Industry P/E: N/A
P/S: 0.53 Price/Book: 4.05 EV/EBITDA: 10.87
Market Cap: $323.38M Avg. Daily Volume: 184,621 52 Week Range: $6 – $13.58

5. CoStar Group Inc. (CSGP): $51.94

Director Michael Klein sold 500,000 shares of this business services provider for $50 per share, generating a total amount of $25 million.

P/E: 81.28 Forward P/E: 48.54 Industry P/E: N/A
P/S: 4.85 Price/Book: 2.87 EV/EBITDA: 22.62
Market Cap: $1.08B Avg. Daily Volume: 104,326 52 Week Range: $37.45 – $53.8

Disclosure: See author's portfolio holdings here.

Source: Notable Buys and Sells: BofA, Microsoft