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Insider Weekends – June 21, 2013

  • June 23, 2013

Welcome to edition 157 of Insider Weekends. Insider buying increased with insiders purchasing $133.47 million of their stock last week compared to $22.81 million in the week prior. Selling increased slightly with insiders selling $1.29 billion of stock last week compared to $1.27 billion in the week prior. We excluded a nearly $1 billion purchase of Dell stock by Carl Icahn because the purchase was not an open-market purchase. Mr. Icahn acquired these shares from Southeastern Asset Management, thereby bumping his stake in Dell to 152 million shares or nearly 9% of the company.

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 9.7. 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 prior week, when the ratio stood at 55.6. 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:

Some of the insider purchases that did not make the top 5 list but are worth exploring include a 10,000 share purchase of biotech Sarepta Therapeutics (SRPT) by one of its directors, continued purchases of the regional bank Middleburg Financial Corporation (MBRG) by David Sokol, a purchase by the CFO of Vicor Corp (VICR) and a purchase by two insiders of Rentrak Corporation (RENT).

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