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Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Wednesday, May 16, 2012 as ranked by dollar value.

On Today's Tables we have a good opportunity to help educate investors in how to analyze insider transactions. More specifically, to relay how 'noisy' data is commonly passed along unchecked.

The two top dollar value purchases on today's tables are a $212.9 million purchase of Theravance (THRX) by GlaxoSmithKline (GSK), and a $144.4 million purchase of Comverge (COMV) by Peak Merger Corp. But neither of these huge trades is useful for helping you make money, and a tip off to that can be seen in the specific transaction type of 'JB*' we've labeled these two large acquisitions with. But what the heck does a JB* transaction code mean?

At InsiderInsights, we've formulated our own proprietary set of Insider Transaction Type codes to better relay important information about a trade at a glance. Our JB* code is a good example of how this works to investors' benefit, and you won't see that code anywhere else. Specifically, the JB* transaction is a trade that is presented on a Form 4 as being an open-market trade, but couldn't be.

We determine that a trade couldn't be open market via various data checks, including checks of a stock's actual trading range and trading volume on the date of the insider's transaction. If the insider's price didn't pass the tape on the day, or the number of shares the insider traded is larger than the volume shown on the tape, we demote the Transaction Type from being an open-market buy (designated by a 'B' in our Transaction Codes), to a JB*.

Our demotion of such a trade doesn't mean that the transaction has no value to analyze. It just means that the trade is not really an open-market one, which means that the transaction is likely less useful for providing investment intelligence than it appears. In the cases of the JB* trades of THRX and COMV on today's tables, both transactions were of share amounts that were much larger than the trading volume shown on the official tape. The THRX transaction price was also below the lowest price the stock traded for on the day.

But there is no mystery or conspiracy about these trades. They both were simply the final acquisitions of company shares related to the pending takeovers of Theravance and Comverge by the buying entities. So these big buys turn out to be the epitome of transactions that look interesting by the headline, but which are not at all useful for relaying investing intelligence investors can potentially make money from. After all, neither THRX or COMV are even trading anymore.

Our JB* Transaction type is also often generated by secondary offerings and private placements. An example of this can be seen further down today's Purchases table in the 6,250,000 share purchase of Sorrento Therapeutics (SRNE) for $0.16 each. This penny stock traded a small fraction of those shares on May 15th, and what did trade went for $0.30. Henry Ji's purchase was via a very favorable private placement. And while we do assign significance when several insiders buy into a secondary offering or private placement (even if there is a 5% or 10% discount to the market price), this lone and too-much-below-market value transaction of SRNO doesn't score high at all in our rating system.

So all the JB* transactions on today's table are just 'noise' for investors who are trying to use insider data in their equity selection process. That's not always the case, but it is today. And the noise removes focus from insider trades that are actually significant--such as ValueAct's continuing purchse of Valeant Pharmaceuticals (VRX) as that stock sells off from recent highs.

Don't be surprised if we edit out noisy JB* transactions like this in future 'Top Insider Trades' articles. After all, we're in this business to find investment opportunities, not just present data for data's sake. And part of our demotion of Transaction Types like we've reviewed above is to help us (and you) not waste time analyzing insider data that really isn't useful.

Which is something investors need to be careful of when viewing the various insider stats, ratios, and scores that seem so common on the Internet these days. Has the source included 'noisy' insider data in the summary statistics presented? Is that supposedly rigorous insider data scoring algorithm scoring all of the trades we demote to JB* as being more important open-market trades just because the insider says they are on the Form 4? And what about the headlines generated every so often when the overall insider buy/sell ratios generated from dollar values of transactions reaches some supposedly scary threshold? Do those ratios contain the sort of 'noisy' trades with large dollar values we just explained away as useless?

The answer is probably: 'yes'. But don't feel hard done by. Even professionals who pay up for insider data via Bloomberg terminals and FactSet subscriptions get stuck with commodity insider data, and insider scores that incorporate a good bit of noise. Just remember, the old saying of 'garbage-in, garbage-out' applies with insider metrics as well.

About InsiderInsights' Top Trades Tables
Company executives and directors are in the best position to assess the attractiveness of their firms' shares, and here is how many of them are voting their wallets!

Please note, however, that these are factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and further analysis of a stock's full insider history may not indicate a significant insider signal.

But at Insider Insights, we find significant insider signals just about every day using screens like these to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (and shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing.

So use these regular columns as the initial research tools they are meant to be, and come to InsiderInsights.com to analyze a company's or insider's full insider history. Also feel free to email with any questions on our proprietary insider data, and how it is best analyzed.

Insider Purchases
#: Filer Name Insider Titles Company Name Ticker Trans
Type
Dollar Value Shares Traded Trans Date
To
Ave Trans
Price
Direct
Holdings
Indirect
Holdings
1 Glaxosmithkline BO Theravance THRX JB* $212,887,008 10,000,000 5/16/12 $21.29 --- 25,814,420
2 Peak Merger BO Comverge COMV JB* $144,421,184 82,526,392 5/15/12 $1.75 0 ---
3 Valueact DIR Valeant Pharmaceuticals VRX B $15,039,100 295,000 5/14/12 $50.98 --- 15,809,302
4 Baker Julian DIR,BO Genomic Health GHDX B $12,740,295 376,059 5/16/12 $34.46 --- 8,922,942
5 Investor Ab BO Nasdaq Omx NDAQ B $7,060,350 300,000 5/14/12 $23.53 --- 18,904,142
6 Cascade Investment BO Autonation AN B $4,487,630 128,564 5/14/12 $34.91 15,592,737 ---
7 Pennant Capital Mgt BO Universal Stainless USAP B $1,242,189 28,001 5/16/12 $43.88 --- 853,900
8 Ji Henry CEO,DIR,BO Sorrento Therapeutics SRNE JB* $1,000,000 6,250,000 5/15/12 $.16 --- 6,250,000
9 Mark Reuben DIR Cabelas CAB B $727,200 20,000 5/15/12 $36.49 1,179,413 ---
10 Whippoorwill Associates BO Us Concrete USCR B $515,000 100,000 5/14/12 $5.15 2,586,762 ---

Source: InsiderInsights.com | Key to Insider Title and Transaction Type Codes

Insider Sales
#: Filer Name Insider Titles Company Name Ticker Trans
Type
Dollar Value Shares Traded Trans Date
To
Ave Trans
Price
Direct
Holdings
Indirect
Holdings
1 Brown & Williamson BO Reynolds American RAI S $22,317,036 551,174 5/16/12 $40.49 239,736,912 ---
2 Page Lawrence CEO,DIR,BO Google GOOG AS $17,402,782 27,778 5/16/12 $629.35 5,000 ---
3 Shriram Kavitark Ram DIR Google GOOG AS $7,812,500 12,500 5/16/12 $625.00 232,764 239,291
4 McAdam John PR,CEO,DIR F5 Networks FFIV AS $6,246,336 50,000 5/15/12 $126.38 173,338 ---
5 Weston Graham M CB,DIR,BO Rackspace Hosting RAX AS $5,136,380 100,000 5/14/12 $51.36 --- 1,456,213
6 Peretsman Nancy B DIR Priceline Com PCLN AS $4,698,417 7,000 5/14/12 $673.31 2,788 ---
7 Singh Alok DIR Validus Holdings VR S $4,397,020 134,107 5/14/12 $32.79 --- 1,870,500
8 Woolley Kenneth M DIR Extra Space Storage EXR S $3,939,810 133,516 5/16/12 $29.50 1,428,063 ---
9 Mateus Tique Jaime DIR Liquidity Services LQDT S $3,750,300 60,000 5/15/12 $62.02 --- 125,262
10 Crosslink Capital O Equinix EQIX S $3,600,364 22,500 5/15/12 $160.09 --- 158,794

Source: InsiderInsights.com | Key to Insider Title and Transaction Type Codes

Source: Top Insider Trades On May 16: Avoid The Noise