The Tycoon Report

Tycoon Report: Latest Insider Buys and Sells

Monday, April 21, 2008 | Dylan Jovine

There probably isn't a day that goes by without us asking ourselves what we can do to improve the Tycoon Report experience.

We say "experience" because The Tycoon Report is far more than just a free investing newsletter. For us, The Tycoon Report represents a financial journey that we make together every day of the week. The destination? Financial Freedom ... and the feeling of peace and serenity that takes hold of you when you get there.

But no journey would be complete if it didn't have its share of ups and downs. And for many of you, the economic speed bumps and recent market volatility have made this one of the more challenging periods we've faced together.

That's why Chris & Teeka have been working harder than usual to record audio and visual market summaries for you. At times like this along our journey together, sometimes it helps to hear the voice of a steady, experienced hand that has seen its share of battles.  If you enjoy listening to them half as much as we enjoy creating them for you then it's been wildly successful.

Today we'd like to introduce a brand new feature that will be published exclusively in The Tycoon Report each day ...

Tycoon Smart Money Tracker

The "TYCOON SMART MONEY TRACKER" is a proprietary internal system we've developed to track top insider and institutional investing activity. 

Each day, exclusively in The Tycoon Report, you'll discover:

(1) Which insiders are spending the most amount of money to buy their companies' stocks ...

(2) Which insiders are selling the largest dollar amount of company stock ...

(3) Which stocks institutional investors such as hedge-funds and mutual funds are buying and selling.

You'll find the Tycoon Smart Money Tracker in each email issue of The Tycoon Report at the top of the right-hand column.  Take a look right now and you'll see how it works!

We are also considering dedicating our Monday issues to a re-cap of the prior week's most important insider moves.  What do you think?

What is having this knowledge each and every day really worth?

Competing services charge anywhere from $50 - $100 per month depending upon the full feature set. But as a Tycoon Report reader, the information is yours - ABSOLUTELY FREE!

We see far more value in this information than $600 - $1,200 per year. Let me explain ...

Back in the 1990's a stockbroker who worked for me claimed to have a very simple - yet very successful - investment philosophy.

“Runny-Nose Ralph” is what we used to call him. And to be perfectly honest with you, I don't even think Ralph was his real name. I think he reminded all of us of another Ralph we used to work with who also had red hair.

But, as I'm sure you can imagine, Runny-Nose Ralph had a distinguishing feature that set him apart from our first Ralph. His other distinguishing feature was that he was always excited – kind of the jumpy type.

He'd get excited when we were getting ready to order lunch. Or when he went to the water cooler. Or to the bathroom. Or coming back from a walk. As a matter of fact, looking back now, it's fair to say that Runny-Nose Ralph got just about as excited as a person could get about any subject he was thinking of. 

Except, of course, investing. The one subject that he never got excited about was investing ...

He didn't care about which way the market was headed. He didn't care about quarterly reports. And he certainly didn't care about the art of business valuation.

All he cared about was following insider trading activity. 

"But that's so clichéd," I said to him on more than one occasion.

"It may sound clichéd," he'd respond breezily, "But insiders have a better finger on the pulse of their company than anybody else. They know when business is slowing down or when it's picking up ... and they know this much sooner than the investing public ever could. That's why insider buys or sells are really the best leading indicator you can get."

Of course I ignored him. Wall Street is full of characters, and I thought he was just one of them. Plus, don't forget, that's back when I was still in my 20's and knew it all. What could anybody – especially him – teach me?

But one day, during the summer of 1999, Runny-Nose Ralph stormed into my office with something very important to tell me. I could tell he was trying as hard as he could not to get excited about it.  But it wasn't working. He would have burst at the seams had I not dropped what I was doing.

It turned out that he was tracking one stock that was trading 9,000 shares one day and 170,000 shares the very next day. "That's not all," he said, gasping a bit for breath. "There was no news to speak of. No earnings reported. No announcement. Nothing!" he finished, almost indignantly.

I looked at him blankly and said nothing. I just had to see if he was gonna finally lose his cool on, of all things, a stock. But he didn't. With a huff and a puff he left my office in a hurry.

Sure enough, 60 days later Ralph's stock was up a whopping 900% and I never heard the end of it (it served me right for being so closed-minded). I think it’s fair to say that, in the almost ten years since, I've come to respect the impact insider trading can have on stock prices.

And that's why we're introducing our daily Tycoon Smart Money Tracker for you absolutely FREE.

Sure, by giving away this information for free, we'll likely upset a lot of firms who charge people $1,200/year for it (especially if they see a lot of folks cancel their memberships to their service in the week following this article).

But you're worth it.  Really.  And this is just our way of thanking you for your patronage.

Best,




Dylan Jovine
Chief Investment Officer
The Tycoon Report


Economic Calendar for the Week of April 21 - April 25

Thursday, April 24

8:30AM - Durable Goods Orders

Release Details

• Importance (A-F): This release merits a B.
• Source: The Census Bureau of the Department of Commerce.
• Release Time: 8:30 ET around the 26th of the month (data for month prior).
• Raw Data Available At: http://www.census.gov/ftp/pub/indicator/www/m3/index.htm.

The durable orders release measures the dollar volume of orders, shipments, and unfilled orders of durable goods (defined as goods whose intended lifespan is three years or more). Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator. These problems can be minimized by looking at the breakdown of orders. The total number is often skewed by huge increases in aircraft and defense orders. An increase based solely on strength in one sector tends to be discounted, while the market is more impressed with broadbased increases in orders.

Also notable in this report is the narrow category of nondefense capital goods. These goods mirror the GDP category producers' durable equipment (PDE) -- the largest component of business investment. Shipments of nondefense capital goods are a good proxy for PDE in the current quarter, while nondefense capital goods orders provide an indication of PDE growth in the quarters ahead.

Highlights

• Raw Data Available At: http://www.census.gov/ftp/pub/indicator/www/m3/index.htm

8:30AM - Initial Claims

Release Details

• Importance (A-F): This release merits a C .
• Source: The Employment and Training Administration of the Department of Labor.
• Release Time: 8:30 ET each Thursday (data for week ended prior Saturday).
• Raw Data Available At: http://www.dol.gov/opa/media/press/eta/main.htm.

Initial jobless claims measure the number of filings for state jobless benefits. This report provides a timely, but often misleading, indicator of the direction of the economy, with increases (decreases) in claims potential signalling slowing (accelerating) job growth. On a week-to-week basis, claims are quite volatile, and many analysts therefore track a four week moving average to get a better sense of the underlying trend. It typically takes a sustained move of at least 30K in claims to signal a meaningful change in job growth.

There are two other statistics in this report -- the number of people receiving state benefits and the insured unemployment rate; neither is watched closely by the market. Some analysts track the number of people receiving state benefits from month to month as a guide for job growth, though this series has a poor track record in predicting the monthly employment report. The insured unemployment rate changes little on a weekly basis and is never a factor for the market.

Highlights

• Initial claims rose 17K to 372K in the week of April 12.
• Continued claims rose 26K to 2.984 mln in the week of April 5.

 
Key Factors

• Leaves a slightly lower 4-week average of 376K.
• The 4-week average of continued claims has now surpassed the Hurricane Katrina effects and well above level at the start of last two recessions.

Big Picture

The early January lows near 300K compared to the 400K level in late March as the labor market is clearly weakening and is reflected by the string of declines in payroll growth.  The current 376K 4-week average is above the averages at the start of the last two recessions.  Continued claims (a better read on hiring declines) also reached the highest level in 3 1/2 years as the 4-week average stands well above the levels at the start of the last two recessions.  Claims provide a nearly real time read on layoffs and the labor market as the employment report reflects the broader combined read of layoffs and hiring. 


10:00AM - New Home Sales

Release Details

• Importance (A-F): This release merits a C .
• Source: The Census Bureau of the Department of Commerce.
• Release Time: 10:00 ET around the last business day of the month (data for month prior).
• Raw Data Available At: http://www.census.gov/const/newressales.pdf .

The report indicates the level of new privately owned one-family houses sold and for sale. New home sales usually have a lagged reaction to changing mortgage rates. They also tend to be stronger early in the business cycle when pent-up demand is strong, and they fade later in the cycle as the demand for housing is sated. In addition to home sales, the market monitors the number of homes for sale relative to the current sales pace. As this inventory measure falls (rises), housing starts tend to rise (fall). Finally, the median home price provides an indication of inflation in the housing sector, though only year/year changes provide any meaningful information.

The home sales report is quite volatile and subject to huge revisions, making any one month's reading very unreliable. The report rarely prompts a market reaction. The market prefers the existing home sales report, which has a sample data pool four times as large and is released earlier in the month.

Highlights

• Briefing.com Forecast:    585K
• Market Consensus:     585K

Key Factors

• Another modest decline leaves a new 13 year low as the level has fallen near -60% since the peak.
• Inventories could edge above the multi-decade high of 9.8 months seen over the prior two months as foreclosures add to the count.
• Median prices are expected to return to a stronger decline after the lift to just a -3% annual decline in February.  -7% from March 2007 peak.
• The drop in prices provide an incentive to hold off purchases as foreclosures add to the downward price pressures.

Big Picture

New home sales are at a 13 year low with no sign of stabilization.  Unsold inventories reached a high of 9.8 months -- a multi-decade high.  Prices are down just -7% from the March 2007 high.  Foreclosures add to the risk for continued price declines as they add to severely bloated inventories.  Then in turn, lower prices can leave mortgage loans to value above 100% and spur more foreclosures.  Buyers will wait for the price declines to near their bottom before stepping in as credit needs to free up to worthy borrowers and help to clear away inventory and get the sector back on its feet.


Friday, April 25

10:00AM - University of Michigan Consumer Sentiment Index

Release Details

• Importance (A-F): This release merits a B-.
• Source: The University of Michigan.
• Release Time: Preliminary: 10:00 ET on the second Friday of the month (data for current month); Final: 10:00 ET on the fourth Friday of the month (data for current month).

The Michigan index is almost identical to the Conference Board Consumer Confidence index, though there are two monthly releases, a preliminary and final reading. Like the Conference Board index, it has two subindexes - expectations and current conditions. The expectations index is a component of the Conference Board's Leading Indicators index.