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Insider Weekends – February 4, 2011

  • February 6, 2011

Welcome to edition thirty five of Insider Weekends. Insider buying dropped sharply last week with insiders purchasing $17.19 million of their stock when compared to $36.95 million in the week prior. Selling more than tripled with insiders selling $1.07 billion worth of stock when compared to $340.66 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 increased significantly to 62.5. In other words, insiders sold more than 62 times as much stock as they purchased. This is the highest the ratio has been since the first week of December. The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 9.22. 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. RLI Corp. (RLI): $55.37

Shares of this property & casualty insurance company were acquired by 3 insiders:

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