Subscribe Today

Get our free articles delivered directly to your email!

Continue reading

Insider Weekends – February 11, 2011

  • February 13, 2011

Welcome to edition thirty six of Insider Weekends. Insider buying nearly tripled last week with insiders purchasing $47.89 million of their stock when compared to $17.19 million in the week prior. This jump in insider buying was largely driven by the big News Corp. purchase discussed below. Selling also increased significantly with insiders selling $1.83 billion worth of stock when compared to $1.07 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 dropped to 38.24. In other words, insiders sold more than 38 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 62.5. 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. News Corp. (NWS): $18.33

Chairman and CEO Rupert Murdoch acquired 1.2 million shares of this media company, paying $16.81 per share for a total amount of $20.17 million.

Only plus or premium subscribers can access this post. Subscribe today.