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Insider Weekends – June 18, 2010

  • June 20, 2010

Welcome to the second edition of Insider Weekends and thank you for your positive feedback after reading the Introduction to Insider Weekends.

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 was 30.11. In other words, insiders sold more than 30 times as much stock as they purchased. This is significantly higher than the 9.41 ratio from the week prior but still well below the high of 68 in the last week of April. We are calculating an adjusted ratio by removing transactions by funds and trying as best as possible only to retain information about insiders and 10% owners who are not funds.

I also removed two sets of transactions, one on the buy side and one on the sell side that were significantly skewing the ratio last week. The transaction on the buy side I removed was the purchase of 15.59 million shares of Lions Gate Entertainment (LGF) by famous investor Carl Icahn through his tender offer of $7/share. Mr. Icahn spent $109.15 million acquiring these shares and bumping up his total stake in Lions Gate to 32%. The transaction on the sell side I removed was the sale of 19.63 million shares of Ulta Salon (ULTA) through an offering by its CEO and other directors that generated $419.39 million. One could argue that while Mr. Icahn is neither a founder of Lions Gate nor part of the management team, taking out that buy transaction makes sense but the sale by the insiders of Ulta Salon should be retained. Not removing the Ulta transaction bumps the ratio up to 48.52.

Notable Insider Buys Last Week:

1. Saul Centers (BFS) $41.89

Chairman and CEO Francis Saul II once again acquired 94,306 shares of this shopping and office REIT paying $3.975 million at an average purchase price of $41.96. Over the last 13 weeks he has purchased over $23 million of Saul Centers stock.

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