Insider Weekends – Carl Icahn Once Again Adds To His Herbalife Stake
From Insider Trades
March 20, 2017 - 11:20am
The following was originally published on Inside Arbitrage.
Welcome to edition 352 of Insider Weekends. Insider buying increased with insiders buying $127.49 million of stock compared to $93.85 million in the week prior. Selling decreased with insiders selling $2.46 billion of stock last week compared to $2.89 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 dropped to 19.31. 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 30.87.
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. Herbalife Ltd. (NYSE: HLF): $56.45
10\% Owner Carl C. Icahn acquired 372,324 shares of this nutrition company, paying $51.35 per share for a total amount of $19.12 million. These shares were purchased indirectly through various entities.
We sometimes make exceptions and highlight insider purchases by 10\% owners and decided to make an exception in this case. The purchase stood out because Bill Ackman capitulated last week and sold his entire long position in Valeant Pharmaceuticals (VRX) at a huge loss. Mr. Ackman is however still short Herbalife and his billion dollar bet against Herbalife is the subject of a documentary called Better on Zero that hit movie theaters last week. The timing of Mr. Icahn’s purchase could either be to signal his continued confidence in the company or the start of a short squeeze on Ackman.
Mr. Icahn’s purchase of Herbalife last August prompted us to write:
We don’t often comment on purchases by 10\% owners but this one was much too interesting to ignore and was another volley in the long-standing battle between Bill Ackman on the shor
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