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Insider Weekends – May 23, 2014

  • May 26, 2014

Welcome to edition 205 of Insider Weekends. Insider buying came back to earth with insiders buying $73.08 million of stock compared to the $223.51 million binge in the week prior. Selling also declined with insiders selling $1.51 billion of stock last week compared to $2.04 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 purchases that week. The adjusted ratio for last week went up to 20.69. In other words, insiders sold almost 21 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 9.16. 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. Continental Resources, Inc. (CLR): $137.36

CEO & Chairman Harold Hamm acquired 42,300 shares of this independent oil & gas company, paying $134.46 per share for a total amount of $5.69 million. Mr. Hamm increased his stake by 0.03% to 126,442,191 shares with this purchase.

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