Mutual Fund Cash Depletion Highest Since 1991
by ilene - March 9th, 2010 4:54 pm
Mutual Fund Cash Depletion Highest Since 1991
Courtesy of Mish
In what can best be described as a contrarian indicator with an uncertain timing trigger, Mutual Fund Cash Depletion Highest Since 1991.
Equity mutual funds are burning through cash at the fastest rate in 18 years, leaving them with the smallest reserves since 2007 in a sign that gains for the Standard & Poor’s 500 Index may slow.
Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009, leaving managers with $172 billion in the quickest decrease since 1991, Investment Company Institute data show. The last time stock managers held such a small proportion was September 2007, a month before the S&P 500 began a 57 percent drop, according to data compiled by Bloomberg.
Stocks will rally this year as the prospect of higher interest rates lures cash from fixed-income securities to equity accounts, says Mark Bronzo at Security Global Investors. Data from ICI, the Washington-based lobbying group for professional money managers, show investors have pumped $369 billion into bond funds since March 2009 versus $23.4 billion for equities.
“There’s so much money in the fixed-income market and there’s so much money in money-market instruments paying almost nothing,” said Bronzo, whose firm oversees $21 billion, in an interview from Irvington, New York. “If that money shifts to stock funds, it’s going to be very bullish.”
Equities may be boosted by investors deploying some of the $3.17 trillion held in money-market funds tracked by ICI. While $754.3 billion has moved from the accounts in 14 months for the fastest decline on record, Bronzo says more cash will be withdrawn as investors gain confidence in the economy.
It gets tiring pointing this out, but the only time money can move into the equity market is at IPO time or other offerings. Otherwise it is impossible for sideline cash to move into equities. For every buyer there is a seller. At the end of any normal equity transaction, there is as much cash on the sidelines as before.
So many misunderstand the simple mathematical function of buying and selling, that I feel obliged to make corrections.
Sentiment, Not Sideline Cash, Is The Driving Force
Share prices do not move up because sideline cash comes in (as noted above it cannot happen in the first place). Share prices rise or fall because buyers or sellers are more aggressive in what they are willing to do. In other words shares are repriced and sentiment…
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INSIDER SELLING HITS NEW 2010 HIGH
by Insider Zone - March 1st, 2010 10:09 am
Update on insider activity from Pragcap – selling still far exceeds buying, confirming my thoughts on Feb. 20 that trends haven’t changed. - Ilene
INSIDER SELLING HITS NEW 2010 HIGH
Courtesy of The Pragmatic Capitalist
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
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
****
For updated Finviz data, go here for a list of recent buys and sells.
(What's this?)
(THE PRAGMATIC CAPITALIST, 2/22/10)
(THE PRAGMATIC CAPITALIST, 3/1/10)
(The Technical Take, 3/1/10)
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INSIDER SELLING HITS NEW 2010 HIGH
by ilene - March 1st, 2010 10:07 am
Update on insider activity from Pragcap — selling still far exceeds buying, confirming my thoughts on Feb. 20 that trends haven’t changed. - Ilene
INSIDER SELLING HITS NEW 2010 HIGH
Courtesy of The Pragmatic Capitalist
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
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
****
For updated Finviz data, go here for a list of recent buys and sells.
(What's this?)
(THE PRAGMATIC CAPITALIST, 2/22/10)
(THE PRAGMATIC CAPITALIST, 3/1/10)
(The Technical Take, 3/1/10)
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INSIDER SELLING SOARS TO 2010 HIGH
by Insider Zone - February 22nd, 2010 12:33 pm
Here’s another article on recent insider buying and selling by The Pragmatic Capitalist. He agrees with my assessment over the weekend (Insider Buying and Selling Trends) that there’s nothing to get excited about yet. - Ilene
INSIDER SELLING SOARS TO 2010 HIGH
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
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:
Notable selling:
Source: Finviz
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INSIDER SELLING SOARS TO 2010 HIGH
by ilene - February 22nd, 2010 12:31 pm
Here’s another article on recent insider buying and selling by The Pragmatic Capitalist. He agrees with my assessment over the weekend (Insider Buying and Selling Trends) that there’s nothing to get excited about yet. - Ilene
INSIDER SELLING SOARS TO 2010 HIGH
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
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:
Notable selling:
Source: Finviz
(What's this?)
(THE PRAGMATIC CAPITALIST, 2/22/10)
(THE PRAGMATIC CAPITALIST, 3/1/10)
(The Technical Take, 3/1/10)
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Insider Buying and Selling Trends
by Insider Zone - February 20th, 2010 1:55 pm
Insider Buying and Selling Trends
By Ilene
A reader recently alerted me to this article, "The inside Track, Commentary: Corporate insiders are betting this is a correction," which suggests that insiders are taking a renewed interest in buying shares of their stock.
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).
Chart 1.
Chart 2.
Chart 3.
Chart 4.
Click on…
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Insider Buying Stages Dramatic Comeback, Nearly 4 Times Greater Than Selling In Prior Week
by Insider Zone - February 1st, 2010 10:32 am
Insider Buying Stages Dramatic Comeback, Nearly 4 Times Greater Than Selling In Prior Week
Courtesy of Tyler Durden at Zero Hedge
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.
Data courtesy of FinViz.
| Attachment | Size |
|---|---|
| Insider Transactions 2.1 - revised.pdf | 577.86 KB |
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INSIDER BUYING DROPS TO LOWEST LEVELS IN A YEAR
by Insider Zone - January 19th, 2010 11:59 pm
INSIDER BUYING DROPS TO LOWEST LEVELS IN A YEAR
Courtesy of The Pragmatic Capitalist
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
Notable selling:
Notable buying:
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INSIDER TRADING REMAINS BEARISH AS 2010 BEGINS
by Insider Zone - January 4th, 2010 4:16 pm
INSIDER TRADING REMAINS BEARISH AS 2010 BEGINS
Courtesy of The Pragmatic Capitalist
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.
Notable Buying:
Notable Selling:
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INSIDERS REMAIN SKEPTICAL OF THE RALLY
by Insider Zone - December 21st, 2009 11:02 am
INSIDERS REMAIN SKEPTICAL OF THE RALLY
Courtesy of The Pragmatic Capitalist
The latest insider trading data continues to show a very stark contrast between the
It’s difficult to read into the selling data too much as insiders sell stock for a number of different reasons, however, the low level of buying continues to represent the very weak fundamental background that insiders see at their own corporations. Although the liquidity and margin driven rally has been impressive we still lack many of the organic fundamental components (revenue expansion for instance) that would give insiders the confidence to invest their own dollars in the long-term growth of their own companies.
Among the notable purchases were the Nelson Peltz purchase of Legg Mason and some interesting insider moves at DPL. Peltz, the billionaire activist, has increased his stake in LM to 4.75% of the company and could be foreshadowing a sale at some point despite LM’s repeated statements that they won’t succumb to such activism. DPL, on the other hand, saw some much smaller purchases, but it’s always interest when the CFO and CEO of a company invest their own dollars in their companies. These are hands down the two most knowledgeable executives at any firm. This one might be worth further investigation….
Notable buys [click on tables to enlarge]:
Notable sales:
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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
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