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Insider Weekends – October 11, 2013

  • October 13, 2013

Welcome to edition 173 of Insider Weekends. Insider buying decreased with insiders purchasing $26.05 million of their stock last week compared to $40.08 million in the week prior. Selling also decreased sharply with insiders selling $229.99 million of stock last week compared to $1.08 billion in the week prior. As we enter earnings season, we are likely to see light insider buying and selling for the next couple of weeks.

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 to 8.83. In other words, insiders sold about 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 26.96. 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. Yum! Brands, Inc. (YUM): $67

Director Robert D. Walter acquired 20,000 shares of this restaurant chain, paying $66.09 per share for a total amount of $1.32 million. Mr. Walter increased his stake by 22.65% to 108,301 shares with this purchase.

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