Insider Buys and Sells: Weekly Wrap-up
Monday, June 1, 2009 | Tycoon StaffRating:
For all the analysts and pundits in the financial media, there is still no better judge of a company's health and future prospects than the owners and executives of those companies themselves, along with major institutional shareholders.
That's why insider buying and selling is a critical piece of data that is monitored by people who invest for a living.
As part of our continuing efforts here at The Tycoon Report to level the playing field between individual investors and the fat cats on Wall Street, we're keeping you informed -- on a daily basis and at no cost whatsoever -- of the most significant insider buying and selling.
Below is a weekly re-cap of the past week's activity of important insider buys and sells. We aim to publish this re-cap every Monday, and it can be accessed in your e-mail issues or on the Tycoon Report Web site.
Very important note: While these re-caps are available on the Tycoon Report Web site, if you want the most timely information we provide on insider buying and selling, be sure to read the e-mail issues that we send each weekday morning.
That's why insider buying and selling is a critical piece of data that is monitored by people who invest for a living.
As part of our continuing efforts here at The Tycoon Report to level the playing field between individual investors and the fat cats on Wall Street, we're keeping you informed -- on a daily basis and at no cost whatsoever -- of the most significant insider buying and selling.
Below is a weekly re-cap of the past week's activity of important insider buys and sells. We aim to publish this re-cap every Monday, and it can be accessed in your e-mail issues or on the Tycoon Report Web site.
Very important note: While these re-caps are available on the Tycoon Report Web site, if you want the most timely information we provide on insider buying and selling, be sure to read the e-mail issues that we send each weekday morning.
Advance Auto Parts (AAP)
President Jimmie L. Wade SOLD $3.9 million in options and exercised $2.3 million in options. View details here.
Chief Operating Officer Kevin P. Freeland SOLD $2.3 million in shares. View details here.
Balchem Corp. (BCPC)
President and CEO Dino A. Rossi SOLD $1.2 million in options . View details here.
BJ's Wholesale Club (BJ)
Chairman Herbert J. Zarkin SOLD $9 million in options and $5.3 million via option exercise. View details here.
BlackRock (BLK)
President Robert Kapito SOLD $1.3 million in shares. View details here.
Buckle Inc. (BKE)
President & CEO Dennis H. Nelson SOLD nearly $4.1 million in options. View details here.
Gilead Sciences Inc. (GILD)
EVP, R&D and CSO Norbert W. Bischofberger SOLD $5.5 million in shares. View details here.
Helen of Troy (HELE)
Chairman, CEO & President Gerald J. Rubin SOLD $2.2 million in shares. View details here.
Monolithic Power Systems Inc. (MPWR)
CEO Michael Hsing SOLD $1.1 million in options. View details here.
Penn National Gaming Inc. (PENN)
Chairman & CEO Peter M. Carlino SOLD $2.1 million in shares. View details here.
Raven Industries Inc. (RAVN)
President & CEO Ronald M. Moquist SOLD $1.3 million in shares. View details here.
Sohu.com (SOHU)
Chief Financial Officer Carol Yu SOLD $1 million in shares. View details here.
SolarWinds Inc. (SWI)
Chairman of the Board & CEO Michael S. Bennett SOLD $2.5 million in options. View details here.
VistaPrint Ltd. (VPRT)
CEO Pres. & Chair. of the BODs Robert S. Keane SOLD $2.2 million in shares. View details here.
Wal-Mart (WMT)
Chairman of Exec. Committee H. Lee Scott Jr. SOLD $5 million in shares. View details here.
Economic Calendar for the Week of June 1-5
MONDAY, JUNE 1
10 a.m., Institute for Supply Management Index
* Importance (A-F): This release merits an A-.
* Source: Institute for Supply Management
* Release Time: 10:00 ET on the first business day of the month for the prior month.
* Raw Data Available At: http://www.ism.ws
The ISM report is a national survey of purchasing managers which covers such indicators as new orders, production, employment, inventories, delivery times, prices, export orders, and import orders. Diffusion indexes are produced for each of these categories, with a reading over 50% indicating expansion relative to the prior month, and a sub-50% reading indicating contraction.
The total index is calculated based on a weighted average of the following five sub-indexes, with weights in parentheses: new orders (30%), production (25%), employment (20%), deliveries (15%), and inventories (10%).
Highlights
* The ISM Index for April rose to 40.1 from 36.3 in March, according to the Institute for Supply Management. The reading was better than the consensus estimate of 38.4.
* The improvement from March was driven by a jump in the new orders index to 47.2 from 41.2.
* The other series indexes broke down as follows: production to 40.4 from 36.4; employment to 34.4 from 28.1; supplier deliveries to 44.9 from 43.6; inventories to 33.6 from 32.2; customers' inventories to 49.5 from 54.0; prices to 32.0 from 31.0; backlog of orders to 40.5 from 35.5; exports to 44.0 from 39.0; and imports to 42.0 from 33.0.
Key Factors
* The dividing line between expansion and contraction in the manufacturing sector is 50.0, although the ISM points out that a PMI in excess of 41.2, over a period of time, generally indicates expansion of the overall economy.
* The ISM report for April trended in a manner that supports the idea the economy is in a bottoming process. In that respect, it is encouraging news. Still, the key takeaway from the survey is that the transition to growth hasn't happened yet.
Big Picture
* This is a highly overrated index. It is merely a survey of purchasing managers. It is a diffusion index, which means that it reflects the number of people saying conditions are better compared to the number saying conditions are worse. It does not weight for size of the firm, or for the degree of better/worse. It can therefore underestimate conditions if there is a great deal of strength in a few firms. The data have thus not been either a good forecasting tool or a good read on current conditions during this business cycle. It must be recognized that the index is not hard data of any kind, but simply a survey that provides broader indications of trends.
WEDNESDAY, JUNE 3
10 a.m., Institute for Supply Management Services
* Importance (A-F): This release merits an improved B-.
* Source: Institute for Supply Management
* Release Time: 10:00 ET on the third business day of the month for the prior month.
* Raw Data Available At: http://www.napm.org
The non-manufacturing ISM report is a national survey of purchasing managers which covers new orders, employment, inventories, supplier delivery times, prices, backlog orders, export orders, and import orders. Diffusion indexes are produced for each of these categories, with a reading over 50% indicating expansion relative to the prior month, and a sub-50% reading indicating contraction.
The index should be far more indicative of the broader economy given its inclusion of service-producing as well as good-producing sectors outside of manufacturing. However, the short history of the index dates to only July 1997 and doesn't provide the insight of a longer period inclusive of varied economic climates.
Highlights
* The ISM Services survey for April revealed an improvement versus March, as the index jumped to 43.7% from 40.8%. The former number was ahead of the consensus estimate of 42.2%, but still connotes a contraction in the non-manufacturing realm since it falls below the line of demarcation at 50%.
* The more gripping message for the market, though, is that the uptick from March suggests the pace of contraction is slowing. The April report, incidentally, marked the seventh straight month the index has been below 50%.
* Like the ISM manufacturing report, the new orders component in the ISM Services report provided one of the more hopeful signs as it rose to 47.0% from 38.8%. The biggest improvements, however, were seen in the import and export indexes. Imports jumped to 48.5% from 37.0% while exports increased to 48.5% from 39.0%.
* The remainder of the series indexes broke down as follows: employment to 37.0% from 32.3%; supplier deliveries to 45.5% from 48.0%; inventories to 43.0% from 40.0%; prices to 40.0% from 39.1%; backlog of orders to 44.0% from 41.0%; and inventory sentiment to 62.5% from 60.0%.
Key Factors
* The overall report fits neatly with the bottoming-out thesis and can be viewed from that perspective in a positive light. Still, it lacks the more convincing growth indication that would be a more meaningful driver for the market at this point.
FRIDAY, JUNE 5
8:30 a.m., Employment Report
* Importance (A-F): This release merits an A.
* Source: Bureau of Labor Statistics, U.S. Department of Labor.
* Release Time: First Friday of the month at 8:30 ET for the prior month
* Raw Data Available At: http://stats.bls.gov/news.release/empsit.toc.htm
The employment report is actually two separate reports that are the results of two separate surveys. The household survey is a survey of roughly 60,000 households. This survey produces the unemployment rate. The establishment survey is a survey of 375,000 businesses. This survey produces the nonfarm payrolls, average workweek, and average hourly earnings figures, to name a few. Both surveys cover the payroll period which includes the 12th of each month.
The reports both measure employment levels, just from different angles. Due to the vastly different size of the survey samples (the establishment survey not only surveys more businesses, but each business employs many individuals), the measures of employment may differ markedly from month to month. The household survey is used only for the unemployment measure -- the market focusses primarily on the more comprehensive establishment survey. Together, these two surveys make up the employment report, the most timely and broad indicator of economic activity released each month.
Highlights
* The April decline in payrolls of 539,000 was a smaller decline than the published economist median expectation of 600,000, but still represents bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, which hardly helps the wealth-producing private sector.
* Widespread losses occurred in the private sector, including a drop of 149,000 in manufacturing and 110,000 in construction.
* The 0.4 increase in the unemployment rate to 8.9% was in-line with expectations.
* Hourly earnings growth did not add much to consumer buying power. Hourly earnings were up $0.01 to $18.51 an hour, which is reported as a 0.1% increase.
Key Factors
* It is hard to derive a positive spin from the recent market argument that at least the rate of decline in economic data is slowing.
* The increase in the unemployment rate is noteworthy for other reasons. The 2009 Obama administration budget (ended Sept. 30, 2009) called for a $1.7 trillion deficit. The economic assumptions assumed an 8.1% average unemployment rate for 2009. That looks like a very long stretch at this time, as the rate is likely to move higher the next few months. That implies that the deficit this fiscal year will be higher than forecast.
* There have been hopes recently of a steadying in consumer spending leading to a stabilization in economic trends this fall or later this year, but the hourly earnings data does not provide much support for that argument.
* These are still massive job losses and wage gains are minimal. Granted, payroll trends do lag overall economic trends, but unless businesses start to show a willingness to hire and not just to lay off fewer people, the market may be ahead of itself in looking at the recent economic data as harbingers of much better trends.
Big Picture
* Employment conditions have worsened significantly in recent months. Through August 2008, payroll declines were moderate, and not at recessionary levels. The September and October declines were much larger and established a new trend. Employment conditions are not likely to improve for quite a few months, particularly as employment picks up only after an increase in overall demand.
