Insiders' stock sale-purchase ratio widens
Insiders' stock sale-purchase ratio widens
Copyright © 2006, Chicago Tribune and Bloomberg News
Published December 7, 2006
Stock sales by America's corporate leaders exceeded purchases last month by the widest ratio in nearly 20 years, according to a Bloomberg analysis of data from the Washington Service, a research firm that tracks such transactions.
Executives sold $63.18 of shares for every $1 they bought in November, the largest ratio since at least January 1987.
"They're pretty savvy market guys," said Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Va. "They see things are slowing down, and they're like, `Man, I'm taking some money off the table.'"
The Standard & Poor's 500 index gained 12 percent in the first 11 months of the year and closed Tuesday at a level not seen since November 2000. But Wilbanks said it could retreat as much as 9 percent within the next six months.
U.S. securities laws require company executives and directors to disclose stock purchases or sales within two business days. Investors such as Wilbanks follow insiders' trading on file at the Securities and Exchange Commission for clues about the prospects for companies.
Insiders sold $8.4 billion in shares last month, according to data compiled from SEC filings by the Washington Service. Buying was almost $133 million, for a sell-buy ratio of about 63.18 to 1.
The overall insider-selling amount was the fifth-highest since 1987. Selling peaked at $13.9 billion in March 2000.
The data have "value for investors," said Wayne Reisner at Carret Asset Management in New York. "It's people who are very familiar with their company and their stock, and they are making a statement."
Some investors say they're unconcerned by the selling.
"Insiders tend to buy when the prices are low and sell when they go up, so it's fairly typical" to have selling during a rally, said Joseph Stocke, chief investment officer at StoneRidge Investment Partners in Malvern, Pa.
But the consistency of the jump in insider selling since June should be unsettling to investors, according to David Coleman, editor of the Vickers Weekly Insider Report.
Insiders executed 6.34 sales transactions for each purchase transaction in the eight weeks ended Dec. 1, Coleman's calculations from SEC filings show. That's up from 2.45 in the period ended Aug. 4 and above the ratio of 2.25 he considers neutral for the market.
"In spite of the fact that insiders typically sell into a rising market, these levels of selling are highly unsettling," Coleman said.
Microsoft ranked first among U.S. companies, with $594.2 million in sales by insiders in November. Seagate Technology and DreamWorks Animation SKG Inc. ranked second and third, at $311.8 million and $224.2 million, respectively. Google Inc. was fourth, at $182.1 million.
Copyright © 2006, Chicago Tribune and Bloomberg News
Published December 7, 2006
Stock sales by America's corporate leaders exceeded purchases last month by the widest ratio in nearly 20 years, according to a Bloomberg analysis of data from the Washington Service, a research firm that tracks such transactions.
Executives sold $63.18 of shares for every $1 they bought in November, the largest ratio since at least January 1987.
"They're pretty savvy market guys," said Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Va. "They see things are slowing down, and they're like, `Man, I'm taking some money off the table.'"
The Standard & Poor's 500 index gained 12 percent in the first 11 months of the year and closed Tuesday at a level not seen since November 2000. But Wilbanks said it could retreat as much as 9 percent within the next six months.
U.S. securities laws require company executives and directors to disclose stock purchases or sales within two business days. Investors such as Wilbanks follow insiders' trading on file at the Securities and Exchange Commission for clues about the prospects for companies.
Insiders sold $8.4 billion in shares last month, according to data compiled from SEC filings by the Washington Service. Buying was almost $133 million, for a sell-buy ratio of about 63.18 to 1.
The overall insider-selling amount was the fifth-highest since 1987. Selling peaked at $13.9 billion in March 2000.
The data have "value for investors," said Wayne Reisner at Carret Asset Management in New York. "It's people who are very familiar with their company and their stock, and they are making a statement."
Some investors say they're unconcerned by the selling.
"Insiders tend to buy when the prices are low and sell when they go up, so it's fairly typical" to have selling during a rally, said Joseph Stocke, chief investment officer at StoneRidge Investment Partners in Malvern, Pa.
But the consistency of the jump in insider selling since June should be unsettling to investors, according to David Coleman, editor of the Vickers Weekly Insider Report.
Insiders executed 6.34 sales transactions for each purchase transaction in the eight weeks ended Dec. 1, Coleman's calculations from SEC filings show. That's up from 2.45 in the period ended Aug. 4 and above the ratio of 2.25 he considers neutral for the market.
"In spite of the fact that insiders typically sell into a rising market, these levels of selling are highly unsettling," Coleman said.
Microsoft ranked first among U.S. companies, with $594.2 million in sales by insiders in November. Seagate Technology and DreamWorks Animation SKG Inc. ranked second and third, at $311.8 million and $224.2 million, respectively. Google Inc. was fourth, at $182.1 million.
posted by Carlos T Mock @ 8:08 AM
0 Comments:
Post a Comment
<< Home