Insider Weekends – November 05, 2010

Welcome to edition twenty two of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $32.8 million of their stock when compared to $3.42 million in the week prior. Selling also increased with insiders selling $3.29 billion worth of stock when compared to $987.33 million 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 100.14. In other words, insiders sold more than 100 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 289.1. 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.

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. GTX Inc. (GTXI): $2.8

Director Joseph R Hyde III acquired 5.5 million shares of this biopharmaceutical company, paying $2.8 per share for a total amount of $15.3 million. 2.2 million of these shares were acquired indirectly through Pittco Investments.

2. The Coca-Cola Company (KO): $62.58

Director Barry Diller acquired 120,000 shares of Coke, paying $61.52 per share for a total amount of $7.4 million.

3. Luby’s Inc. (LUB): $5.4

Shares of this restaurant chain were purchased by two insiders:

• President & CEO Christopher James Pappas acquired 156,612 shares, paying $5.07 per share for a total amount of $794,023.
• Chief Operating Officer Harris Pappas acquired 156,612 shares, paying $5.07 per share for a total amount of $794,023.

These purchases were done indirectly by privately held Pappas Restaurants, Inc. Chris and Harris Pappas are grandsons of the founder of Pappas Restaurants and also manage Luby’s. While there were two separate filings, these duplicate filings could very well represent a single purchase of 156,612 shares by Pappas Restaurants.

4. Duncan Energy Partners LP (DEP): $32.7

Director Joe Havens acquired 37,500 shares of this oil & gas pipelines company, paying $31.24 per share for a total amount of $1.17 million.

5. Skilled Healthcare Group, Inc. (SKH): $5.25

Shares of this long-term care facility were purchased by three insiders:

• Director William Scott acquired 200,000 shares, paying $5.19 per share for a total amount of $1.04 million
• President Hospice and Homecare Shane Peck acquired 10,000 shares, paying $5.45 per share for a total amount of $54,518
• Director Michael Boxer acquired 4,500 shares, paying $5.46 per share for a total amount of $24,580

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $26.85

Shares of Microsoft were sold by four insiders:

• Chief Executive Officer Steven Ballmer sold 49.34 million shares for $27.06 per share, generating a total amount of $1.3 billion
• Director Bill Gates sold 3 million shares for $27.22 per share, generating a total amount of $81.65 million
• Chief Operating Officer Brian Kevin Turner sold 48,956 shares for $27 per share, generating a total amount of $1.32 million
• Chief Accounting Officer Frank Brod sold 15,000 shares for $27.13 per share, generating a total amount of $406,965

2. Amazon.com Inc. (AMZN): $170.77

Shares of this online retailer were sold by two insiders:

• Chairman, CEO and President Jeff Bezos sold 932,811 shares for $163.26 per share, generating a total amount of $152.29 million
• Senior Vice President Michelle Wilson sold 3,300 shares for $165 per share, generating a total amount of $544,500

3. Oracle Corp. (ORCL): $29.25

Chief Executive Officer Lawrence Joseph Ellison sold 5 million shares of this enterprise software company for $29.28 per share, generating a total amount of $146.4 million. Oracle has been on our list for seven weeks in a row.

4. Marriott International, Inc. (MAR): $39.55

Shares of this hotel company were sold by four insiders:

• Chairman & CEO J W Marriott Jr sold 2.29 million shares for $36.8 per share, generating a total amount of $84.3 million
• Member of 13D group owning more than 10% John W Marriott III sold 200,000 shares for $36.6 per share, generating a total amount of $73.2 million
• Member of 13D group owning more than 10% Stephen Marriott sold 40,000 shares, for $38.26 per share, generating a total amount of $1.53 million
• Member of 13(d) group Deborah Marriott Harrison sold 26,035 shares for $37.42 per share, generating a total amount of $974,324

5. Live Nation Entertainment, Inc. (LYV): $9.81

Director Barry Diller sold 2.53 million shares of this general entertainment company for $9.62 per share, generating a total amount of $24.35 million. This sale came shortly after Mr. Diller quit his post as Chairman of Live Nation.