Tuesday, September 14, 2010

Are Insiders Buying Or Selling?

Them US Markets are hot eh?

Ok, we have seen equity mutual investors making continued redemptions since end April 2010.

But what about the Insiders of S&P 500 companies?

Hmm... on Bloomberg: Weekly Insider Buying and Selling by S&P 500 Companies

First the good news...




That's all.

oO

Yes, only 4 S&P Companies have seen their insiders buying stocks!

Now I like compiling such stuff into my worksheets. :D


Total amount bought by insiders US$ 509,397.

Now here come the sellers....

The list have 72 company names! LOL!

To show the list in a readable form, I have to upload in several shots.


continued.... note I use the hide function on the worksheet and ebay name is repeated...


continued... WW Grainger Inc is shown again...


and lastly....



And the TOTAL amount sold by insiders equals US$ 332,101,829.

What's the amount purchased by the insiders again? US$ 509,397



How?

ya, ya, ya... every seller got buyer and every buyer got seller....

BUT how?

What does this weekly data for the week ending Sep 10 suggest to you?

Why are the insiders selling like crazy?

Don't they know or aren't they aware that apparently things are getting better?

How now brown cow?

ps: this post does not suggest what the market will or will not do.

20 comments:

bonny b said...

Dear Moo,
Yes, the world outside is a dangerous place now in the aftermath of the great recession. There is bound to be an extended period of uncertainty whilst the 'wise' leaders do their work. What we know is that a lot of liquidity has been created in order to bail out the big players and financiers. With all this money on their balance sheets, banks have to put them to work. So, again the big boys have a fine time sloshing this money around, from equities to commodities, to derivatives, and even properties in some places. Some even find their way to small markets like Msia. So, the question is what are we to do? Esp the smaller investors who do not venture abroad? Are we to be contented with safe 5% yields on fixed income instruments?
By and large, we are still relatively insulated from outside storms; esp true of GLCs. So, lets not lose heart and continue striving for better returns. There are still plenty of good fish here. Just like u have always reminded, we need to do our own homework and there'll be fish on the table...always.

Moolah said...

So the insiders seems more interested in disposing their stakes is a non-issue?

:D

Moolah said...

ps: I hope you are not too worried that I keep posting articles that contradicts the reasoning for a fundamentally strong market rally.

:D

bonny b said...

With or without a strong rally, there will always be fish on the table if we know where to drop our lines...That was how Buffet performed through the years isnt it??

bonny b said...

Incidentally, caught this phrase from TPC about state of US mkt.."The entire herd is either all grazing or all running scared at the same. Currently, the herd is grazing happily with not a care in the world. But don’t be fooled – when something spooks them you’ll get trampled if you don’t run with them….."
I suppose we always have to be mindful of which direction the herd is racing along.

Moolah said...

Most important I do not want to be the fish or the cow meat on the table.

LOL! :P

Quote: That was how Buffet performed through the years isnt it??

Unker Buffy strategy is totally different isn't it?

And the 'playing field' is different, isn't it?

Anyway... I do not want to be him. Do you?

:-)

Moolah said...

Oh.. btw... wasn't there were a period of time when Unker Buffy totally cashed out from the markets?

:-)

Kelvin Yam said...

Nice finding.

No surprise. Smart Money sells on good news. When the crowds get over excited with KLCI going to break 1500, it's time to think from a different perspective.

Gamelion said...

Markets can remain irrational longer than investors can remain solvent !

bullbear said...

Dear Moo,

There are many reasons for insider selling. There is only one reason for insider buying, i.e., the stock is cheap.

There are more than 10,000 stocks in the US market and the market capitalization of S&P is probably in the trillions.

From your post, the sellers overwhelm the buyers in monetary terms by a large amount. However, this selling amount of JS $332 million in comparison to the whole market capitalization is an insignificant amount. (Maybe you disagree on this point).

The selling by the insiders should focus the investors on these stocks that insiders are selling. As to its extrapolation to the whole market ... that is a different story.

Moolah said...

For those who are interested, here is an alternative site to use.

http://www.finviz.com/insidertrading.ashx?or=-10&tv=100000&tc=2&o=-transactionValue

Check out the 'screener' for the stocks where top insiders are selling here.

snowball said...

Hi Moolah,

Thanks for the site. Good recommendation. The stock screener is great.

bullbear said...

What to do when insiders sell?

There is simply no clear-cut rule to follow when an insider in a stock you own disposes of a large parcel of shares.

But there are two key questions to ask when considering such sales, the answers to which might provide some guidance for you:

1. Is the stock expensive?

2. Is this a series of sales by the same director or, more importantly, sales by multiple directors?

Insider sales should always be taken seriously, even if they don't necessarily prompt a sale in your own portfolio.

Director sales are not always a bad sign but they're never a good one.

If you've had the company shares, you may wish to follow the story a little more carefully.

http://www.smh.com.au/business/what-to-do-when-insiders-sell-20100322-qq13.html

Moolah said...

Aisehman my dearest bb, that article not very good leh.

I am sure you, yourself, can ask better questions than the 2 so-called key questions raised.

:D

Moolah said...

bb: just sharing my simple thoughts.

For example, I might be wrong but I would ass-u-me that these insiders are more privy to the operations of their company. Yes, I would assume they know 'more'.

Now if they sell... what would be my biggest concern? Well, I would put on the kiasu and kiasi cap on and tell myself 'Walauehhh... what if THEY (the insiders) know that their business not as good as what the market assumes? what if this the main reason they sell?

And what if a bunch of them from different companies all continue to sell?

Maybe this is telling me that the economy is really not that good!'


How?

I dunno about you but IF I am a kiasu and kiasi, I would be asking myself that. :P

Let me use FINVIZ website and assume that their data is the best and most accurate.

Yesterday, Sep 14 2010, SEC form 4 filings.

Compilation of sales: http://www.finviz.com/insidertrading.ashx?tc=2. ( Right most column indicates the date of filing and for simplicity sake, let's use date of filing instead of date of sale. - ya.. THEY don't report punctually!)

Now this is the compilation insider buying. http://www.finviz.com/insidertrading.ashx?tc=1 (ps: note the last column and see where the Sep 14 ends and compare against the earlier list of sales again)

ps: I ONLY present you the data. I am sure you can make your own conclusions. :-)

Moolah said...

cont..

Back to my posting, the first table of sales

Let's look at the top 2 sale using FINVIZ website.

1. Ticker LTD. LTD (clicable link to FINVIZ)

Stock was said to have a PE of 13.

Scroll to the bottom.

I see the sale done by Chairman and CEO, WEXNER LESLIE H

2. Next is Google. Goog

scroll to the bottom...

my... do you see the list of insider sales?

then compare the sale versus the list of recommendations on the stock (you can see it in the middle of the page)

And so on.. and so on....


ps: Again I ONLY present you the data. I am sure you can make your own conclusions. :-)

bonny b said...

Everybody's so innocent and honest it brings tears to my eyes. Insiders in ALL markets only show what they want u to see. In the public domain, the obvious is seldom what it seems. Still, if we do our own homework, and have a good feel of the herd, everything shd be honky-dory. Fish on the table!!

Moolah said...

"Everybody's so innocent and honest it brings tears to my eyes"

Waloehhhh!!!

The teary investor or issit the teary trader???


oops...

sorry... it's the teary fish eater!

:P

damn... where's my hanky now?

:P

bonny b said...

Ha Ha, sorry I forgot moo-moos are herbivores...

Moolah said...

bonny b: Did you 'glance' thru the Form 4 fillings as per Sep 15th?

http://www.finviz.com/insidertrading.ashx?tc=2

:-)