Let’s take a look at Insider Buying and Selling over the last week or so. These are screen shots from Finviz - the significant buys against a green background first and significant sells against the pink background second. All the buys fit into my screen shot but the sells did not. Click here to see all the sells.
Note that the largest buy in the group, for KITD was at a price of 9.73 (KITD is currently at 11.54). The buy was part of an Equity Offering rather than an open market purchase. Tuzman Kaleil Isaza’s (KITD’s Chairman and Chief Exec. Officer) history of buys is here.
Note selling in favorites such as CSCO, GOOG and AMZN.
The recent uptick in stocks has not been met with much enthusiasm by corporate insiders. In fact, pessimism rules the day in the land of insider buying and selling trends. For the week ending February 26th insiders sold a total of $1.88B in stock and purchased just $13.22MM. Selling was up substantially from last week and buying was down substantially from last week. The selling was the highest level experienced this year. Interestingly, as the rally has continued insiders have actually increased their selling.
Of course, insiders sell for numerous reasons so it’s foolish to look at insider selling alone, however, the low level of buying tells the real story here. Insiders simply don’t trust the long-term viability of the equity rally based on the condition of their internal operations. Perhaps most alarming in this data is the fact that it is not solely a problem in the United States. As we noted last week, the problem is pervasive in China as well where insider buying and selling trends remain negative. Clearly, Main Street investors aren’t the only ones aware of the government induced rally in stocks. The stimulus based recovery in China is apparently causing some concern in the corner offices in Hong Kong as well.
There was no notable buying this week, however, there were some interesting trends in selling. Sales across the consumer discretionary space we particularly heavy. Selling was very heavy in Whole Foods (WFMI) where insiders clearly desire to take profits following the 25%+ rally in recent weeks. Other notable sales included sizable selling by the CFO’s of TJX and VF Corp. As we’ve previously mentioned, sales by CFO’s are always intriguing because no insider knows the company finances like the CFO. All notable buying and selling is attached:
Notable selling:
Source: FinViz
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For updated Finviz data, go here for a list of recent buys and sells.
Insider selling soared 17% for the week ending February 20th and hit a new 2010 high. Total buying also picked up, but remains near historically low levels. Total selling reached $956MM while buying totaled just $96.3MM?. Insider buying has been unusually low throughout the rally as economic fundamentals remain questionable. Recent signs of recovery have done little to encourage insiders to invest their personal dollars in their own companies.
There were no notable purchases this week. On the sell side, large sales from CFO’s are also interesting. In this week’s report we saw large sales from the CFOs of Netflix and Walter’s Industries. Arguably, there is no one more familiar with corporate financial condition than the CFO so we always take notice of insider sales by CFO’s. All notable sales are attached:
One of the most bearish omens on Wall Street is for corporate insiders, in the face of a market decline, to accelerate the selling of their companies’ shares.
That would mean that they have no confidence that those shares will recover any time soon and have decided to unload their shares, even at depressed prices.
That’s why analysts have been paying close attention to insider behavior since the stock market began correcting in mid January.
Fortunately for the bulls, they did not sell more stock into that decline. On the contrary, recently released data show that insiders have not only cut back on their selling, but also increased the pace of their buying.
This suggests that they believe that their companies’ shares will soon be going back up in price…
For the week ending Jan. 15, for example, which was the week in which the stock market hit its high, this sell-to-buy ratio was 5.15-to-1, which meant that insiders that week were selling more than five shares for every one that they were purchasing.
For the week ending Feb. 12, in contrast, according to the latest issue of Vickers Weekly Insider Report, the ratio was less than half as high, at 2.42-to-1.
Because of this marked improvement in the sell-to-buy ratio, David Coleman, Vickers editor, views "the recent downturn as likely being only a near-term correction. We remain cautious, but are increasingly optimistic about the future performance of the overall markets."
Other than a brief spike in the buy/sell ratio (chart 4 below), I don’t see much support for the thesis that insiders are buying up noteworthy amounts of stock reflected in the insider buying and selling trends. It seems more like there was a brief pause in selling, causing a brief spike in the buy/sell ratio. Take a look at the charts below–buying in dollar amount, buying in share number, selling in dollar amount, and the ratio of buying to selling. It seems to me the conclusion that insiders are showing a build-up in confidence is a bit premature (if not entirely unfounded) based on these data.
Finviz has more data, go here for a list of recent buys and sells. (See charts five and six).
We just recently alerted you to the fact that ‘corporate raider’ Carl Icahn had bought more Take Two Interactive (TTWO). Well, he has added to his position again. Icahn purchased 300,000 additional shares at a price of $9.18 on February 5th. Then on February 8th, he purchased 800 more shares at $9.21. After all is said and done, Icahn now owns 10,873,033 shares through his various investment vehicles. We’ve detailed all his past activity, including how Icahn exercised calls on TTWO a few weeks ago and ramped up his initial stake. He is certainly positioning himself to institute change at the company in order to generate returns for shareholders and we’ll see how it turns out.
Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution."
After a brief respite last week, insider buying and selling trends returned to their regularly scheduled bearishness. The recent market dip has not attracted many buyers to the market as total insider buying for the latest week totaled just $10.2MM. Total selling surged to $490MM from last week’s reading of $250.1MM.
The insider selling and buying trends continue to reflect the low level of confidence that insiders have in the future performance of their own shares. This has been best reflected in the continuing weak trends in the labor markets and the lack of organic growth in corporate earnings. Without substantial improvement in labor trends and signs of sustainable earnings growth it’s likely that insiders will continue to be heavy net sellers of their own shares.
Correction: due to a data compilation error, the ratio of buys to sell was actually lower: 3.8x. Still, The big bulk buys pushed the ratio to a favorable buying balance. Absent the three big block buys, the balance of the buys accounted for only $10 million.
In one of the more dramatic comebacks seen in the past year, insider buying has finally surpassed insider selling, and that by a wide margin. In the prior week insiders bought $390 million worth of stock while selling just $103 million. Yet the bulk of the buying was concentrated in 3 bulk purchases: MatlinPatterson’s acquisition of $300 million worth of FlagStar Bancorp (which judging by its stock price isn’t doing all that hot to date - may be worth a second look), Orbitz Worldwide Director Paul Schorr’s purchase of $50 million in OWW stock and Intermune direct Jonathan Leff’s purchase of $30 million worth of Intermune. Aside from these transactions there were no major notable buys or sells: the largest sale was a $6 million sale of DeVry stock by 10% owner Dennis Kellner.
As the recession on Main Street continues the negative trends in insider buying get even worse. Insider buying fell to a new low of $7.8MM on the week. Selling dropped from $318MM to $293.22MM, but remains at very high levels. I continue to believe this is a reflection of the ongoing secular bear market as corporate insiders see little to no real recovery in revenues and sustainable organic growth. Due to this, they have little to no faith in the long-term sustainability of future increases in their own corporation’s stock prices. This is best reflected in the incredibly lopsided insider transactions.
2010 has started off with a bang. Insiders purchased $4.5 million worth of stock (and yes, this does not include the end year transaction by such individuals as Nelson Peltz who acquired nearly 10 million shares of Legg Mason on the last day of 2009, to validate his recent board seat standstill), in the period from January 4. It should, however, comes as no surprise that in the same period selling did not moderate, and insiders offloaded $281 million in shares (yes, this accounts for the double counting of trades between various ultimately identical corporate entities, which seems to have been missed by some of our peers). Net result: an insider selling to buying of 62x to kick off 2010. And still the quants are chasing momentum ever higher. There is no way this will end in anything but tears.
As we turn the page on a new year the trend in insider trading remains largely the same as it was in 2009. Although the holiday week was shortened, insiders still found time to unload millions of shares in their own companies. In the last week of the year insiders sold over $222MM worth of stock while purchasing just $18.5MM worth of stock.
We believe this very bearish data is likely due to the long-term trends executives see within their own companies. Although insider trading is never a good short-term indicator it is very useful as a long-term indicator. After all, insiders rarely purchase their own shares with a short time horizon. Therefore, we believe insiders continue to refuse to invest their own money in their companies due to the negative trends they see in top line growth and job growth. In other words, they know the margin expansion story is not sustainable in the long-run and that the likelihood of another downturn in the market remains very high over the course of the next few years.
Of the few purchases the Nelson Peltz purchases continue to stand out. Although he claims not to have an activist interest in the Legg Mason, he continues to pour money into the firm and his history doesn’t tend to be that of an idle investor and board member.
As eventful as the past few months have been (what with Greece, California, Illinois, Iran, the Lehman Brothers revelations, U.S./China trade friction, and record deficits just about everywhere), you’d think the financial markets would be agitated, to put it mildly. Instead, just about everything is range-bound, and the things that aren’t, like U.S. stocks, are trending slowly, reassuringly, higher. This has taken the VIX, the main measure of fear (i.e. volatility) in the options market down to levels last seen before the ...
The front month on the SP futures has now switched from March to June as a part of the Quad Witching Expiration. (Technically it switched last week, but for charting purposes I made the switch last night.) The June Futures have essentially the same formations as did March, it's just that the earlier months have few trades to mark them.
This is the first serious test for US equities since mid-February, as it has been on a spectacular rally streak, no doubt fueled by excess liquidity applied to a selling exhaustion in the funds. Curiously not among corporate...
As I always do before options expiration I reviewed our Buy List, which, this quarter, is a list of 37 stocks we've been playing since late December and, sadly, after reviewing 37 of our favorite investments very carefully this week - I could only conclude that cashing them out was the only decision I could be comfortable with this week. Of 66 trades we had on our 37 stocks, 64 are winners with an average return since 2/8 of 28% - since most of the trades were designed to make 40% for the year - it just seems silly not to take the money and run now, on March 19th.
You are not supposed to have 64 out of 66 winners in 6 weeks, you are not supposed to make 3/4 of what you anticipate for the year in 6 weeks - that is NOT how the markets are supposed to work! When the ma...
Today’s tickers: BBY, DNDN, GLD, BAC, AET, BA & NBR
BBY - Best Buy Co., Inc. – Shares of the world’s largest electronics retailer rallied 2% to $41.25 during the trading session after receiving an upgrade to ‘buy’ from ‘neutral’ at Goldman Sachs Group where analysts increased BBY’s target share price to $47.00 from $44.00. Options traders employed a few different bullish tactics to position for continued upward movement in the price of the underlying stock through expiration in April. Plain-vanilla call buyers targeted the April $44 strike to purchase 5,100 calls for an average premium of $0.55 apiece. These investors stand ready to accrue profits if Best Buy’s share price increases 8% from the current value to exceed the effective breakeven point on the calls at $44.55 by expirati...
Let's take a look at Insider Buying and Selling over the last week or so. These are screen shots from Finviz - the significant buys against a green background first and significant sells against the pink background second. All the buys fit into my screen shot but the sells did not. Click here to see all the sells.
Note that the largest buy in the group, for KITD was at a price of 9.73 (KITD is currently at 11.54). The buy was part of an Equity Offering rather than an open market purchase. Tuzman Kaleil Isaza's (KITD's Chairman and Chief Exec. Officer) history of buys is http://www.insidercow.com/more from Insider
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(