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Insider Weekends – June 29, 2012

  • June 30, 2012

Welcome to edition 108 of Insider Weekends. Insider buying more than doubled with insiders purchasing $37.2 million of their stock last week compared to $17.9 million in the week prior. Selling declined sharply with insiders selling $340.6 million worth of stock last week compared to $917.9 million in the week prior. There was heavy insider buying in the energy sector, especially oil and gas services, and three out of the top 5 insider purchases listed below are from that sector.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped down to 9.1. In other words, insiders sold more than 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 51.1. 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, 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. Energy Transfer Equity, L.P. (ETE): $41.02

Director Kelcy L. Warren acquired 239,975 shares of this oil & gas pipelines company, paying $39.48 per share for a total amount of $9.5 million. These shares were purchased indirectly by Kelcy Warren Partners II, L.P.

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