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Insider Weekends – November 26, 2010

  • November 27, 2010

Welcome to edition twenty five of Insider Weekends. Insider buying decreased significantly last week with insiders purchasing $9.17 million of their stock when compared to $25.73 million in the week prior. Selling also decreased with insiders selling $1.38 billion worth of stock when compared to $2.37 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 up to 150.77. In other words, insiders sold almost 151 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 92. 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. Citigroup, Inc. (C): $4.11

CEO, Consumer Banking Americas, Manuel Medina-Mora acquired 542,198 shares of this global financial services company, paying $4.3 per share for a total amount of $2.3 million. Mr Mora increased his stake by 7.76% to 7,530,850 shares with this purchase.

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