Ironically, as CNBC was running an anniversary special “20-years later” about the Enron bankruptcy on December 2, 2001, we upgraded EOG Resources, which was “born in 1999, declaring our independence from Enron Corp.” (from the company’s website). We downgraded and had a negative rank on Enron, prior to their bankruptcy, based on a large sale from the CFO (Andrew Fastow) in November 2000 at $83 per share. That was a great sale on his part, reducing his holdings by -58%.

For full disclosure, our mistake was taking the stock from -1 to neutral in August 2001 when Fastow bought 10,000 shares at $36.98, just four months prior to bankruptcy.

Maybe that purchase was an attempt to show his innocence or ignorance? If so, it proved unsuccessful as he was eventually sentenced to six years in prison for conspiracy. Maybe he should have bought more?

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