Insider Buys and Sells: Weekly Wrap-Up
Monday, June 2, 2008 | 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.
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 effort 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. We publish this re-cap every Monday, and it can be accessed in your email issues or on the Tycoon Report website.
Very important note: While these Monday re-caps are available on the Tycoon Report website, if you want the most timely information we provide on insider buying and selling you've got to be sure and read the email issues that we send each weekday morning.
BUYS
Newmarket Corp. (NEU)
Company Director Bruce Gottwald has BOUGHT over $13 million in NEU stock.
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Sandridge Energy Inc. (SD)
CEO Tom Ward has BOUGHT just over $45.5 million in SD stock since May 19.
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Allos Therapeutics Inc. (ALTH)
An institutional investment group has BOUGHT $8.25 million worth of ALTH stock.
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Autonation Inc. (AN)
Eddie Lampert has BOUGHT another $8.1 million worth of AN stock.
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General Electric Co. (GE)
CEO Jeffrey Immelt has BOUGHT just over $3.5 million in GE stock.
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Dick's Sporting Goods Inc. (DKS)
CEO Edward Stack has BOUGHT just over $1 million worth of DKS stock.
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National Coal Corp. (NCOC)
Geologic Resource Partners has BOUGHT $620,000 in NCOC stock.
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SELLS
WJ Communications Inc. (WJCI)
Numerous executives and other large investors have been SELLING WJCI stock in May, most notably sales worth a combined total of nearly $50 million by two company directors.
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Owens Corning (OC)
An institutional investor has SOLD over $112 million in OC stock.
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Taleo Corp. (TLEO)
Director Jeffrey Schwartz has SOLD more than $7.8 million in TLEO stock.
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Comcast Corp. (CMCSA)
Stephen Burke, Comcast COO, has SOLD $3.9 million in company stock.
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BJ's Wholesale Club Inc. (BJ)
Chairman/ CEO Herb Zarkin has SOLD just north of $9.5 million worth of BJ stock.
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Johnson & Johnson (JNJ)
JNJ's CEO has SOLD nearly $4 million in company stock.
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Estee Lauder Companies Inc. (EL)
Chairman Robert Lauder has SOLD more than $10 million worth of EL stock.
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Earthlink Inc. (ELNK)
A company director has SOLD nearly $2.8 million in ELNK stock.
View Details Mark Your Economic Calendar: What's ahead for the week of June 2, 2008
Economic Calendar for the Week of June 2 - June 6
Monday, June 2
10:00AM - Construction Spending
* Importance (A-F): This release merits a D.
* Source: The Census Bureau of the Department of Commerce.
* Release Time: 10:00 ET on the first business day of the month (data for two months prior).
* Raw Data Available At: http://www.census.gov/const/www/c30index.html.
The construction spending report is broken down between residential, non-residential, and public expenditures on new construction. The monthly changes are both volatile and subject to huge revisions, so this report rarely has any market impact. Only trends extending over three months or more can be viewed as significant.
The spending figures are in both nominal and real (inflation adjusted) dollars. The real figures for residential and nonresidential spending are used by economists to forecast the investment component of quarterly GDP. The annualized percent changes between the quarterly averages of these two components match up well with residential investment and commercial structure changes in the GDP accounts.
10:00AM - ISM 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%).
The ISM is one of the first comprehensive economic releases of the month, typically preceding the employment report. Though it covers only the manufacturing sector, it can often provide accurate hints regarding the tone of subsequent releases. During periods of inflation concerns, the prices paid and vendor deliveries indexes often determine the bond market's reaction to the report.
Tuesday, June 3
8:30AM - Auto Sales, Truck Sales
* Importance (A-F): This release merits a C-.
* Source: Individual auto manufacturers, seasonal factors by the Commerce Department.
* Release Time: Varies by auto maker from the first business day to the third business day of the month (data for month prior).
Auto and Truck Sales measure the monthly sales of all domestically produced vehicles. They are considered an important indicator of consumer demand, accounting for roughly 25% of total retail sales. Demand for big ticket items such as autos and trucks tends to be interest rate sensitive, making the motor vehicle sector a leading indicator of business cycles.
Each auto maker reports sales individually. The reports are typically released over the course of the first three business days of the month. Using the individual reports, a total annual sales pace can be calculated after applying Commerce Department seasonal factors. It is this annual sales pace that the market refers to when discussing auto and truck sales for the month.
10:00AM - Factory Orders
* Importance (A-F): This release merits a D .
* Source: The Census Bureau of the Department of Commerce.
* Release Time: 10:00 ET around the first business day of the month (data for two months prior).
* Raw Data Available At: http://www.census.gov/ftp/pub/indicator/www/m3/index.htm.
Factory orders consist of the earlier announced durable goods report plus non-durable goods orders. The report is very predictable with nondurables the only new component. Nondurables consist of such items as food and tobacco products which grow at a fairly consistent monthly rate, so that market forecasts for this report are far more accurate than for the durable orders report. In addition to seeing nondurables for the first time, the market also watches for revisions to the durable orders data, which can be significant. At present, durable goods orders sum to about 54% of total orders.
The final piece of new information in this report is factory inventories -- the first glimpse at the inventory picture each month (wholesales inventories are typically released a week later, with retail inventories released a few days after wholesale inventories). Though the inventory figure is not a market-mover, economists use this number to help forecast inventories in the quarterly GDP report.
Wednesday, June 4
8:30AM - Productivity-Revised
* Importance (A-F): This release merits a D .
* Source: The Bureau of Labor Statistics of the Department of Labor.
* Release Time: 8:30 ET around the 7th of the second month of the quarter (data for quarter prior).
* Raw Data Available At: http://stats.bls.gov/news.release/prod2.toc.htm.
Nonfarm productivity and costs provide measures of the productivity of workers and the costs associated with producing a unit of output. During times of inflationary concern, the unit labor cost index in this report can move the market. If productivity is falling, unit labor costs may be rising faster than hourly earnings and other labor cost measures. Because productivity can be quite volatile from one quarter to the next and because the previously released GDP report will give a good indication of productivity growth, this report seldom has a significant impact on the market.
In addition to the preliminary report, a revision to the productivity data is released in the third month of each quarter. As with the preliminary report, the GDP data released prior to the productivity data provide a clear indication of the direction of the productivity revision.
10:00AM - ISM 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 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. The seasonal adjustment of the index didn't begin until January 2001 with only 3 of the 9 components seasonally adjusted as of April 2001. The lack of historical data and lack of a tight correlation to the non-manufacturing economy leaves the relatively poor "B-" rating compared to the "A-" rating of the well-respected manufacturing ISM index.
Thursday, June 5
8:30AM - Initial Claims
* 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 signaling 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.
8:30AM - Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate
* 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 which 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 focuses 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.
Total payrolls are broken down into sectors such as manufacturing, mining, construction, services, and government. The markets follows these components closely as indicators of the trends in sectors of the economy; the manufacturing sector is watched the most closely as it often leads the business cycle. The data also include breakdowns of hours worked, overtime, and average hourly earnings.
The average workweek (also known as hours worked) is important for two reasons. First, it is a critical determinant of such monthly indicators as industrial production and personal income. Second, it is considered a useful indicator of labor market conditions: a rising workweek early in the business cycle may be the first indication that employers are preparing to boost their payrolls, while late in the cycle a rising workweek may indicate that employers are having difficulty finding qualified applicants for open positions. Average earnings are closely followed as an indicator of potential inflation. Like the price of any good or service, the price of labor reacts to an overly accommodative monetary policy. If the price of labor is rising sharply, it may be an indication that too much money is chasing too few goods, or in this case employees.
10:00AM - Wholesale Inventories
* Importance (A-F): This release merits a D-.
* Source: The Census Bureau of the Department of Commerce.
* Release Time: 10:00 ET around the fifth business day of the month (data for two months prior).
* Raw Data Available At: http://www.census.gov/svsd/www/mwts.html.
The wholesale trade report includes sales and inventory statistics from the second stage of the manufacturing process. The sales figures say close to nothing about personal consumption and therefore do not move the market.
Wholesale inventories sometimes swing enough to change the aggregate inventory profile (aggregate inventory is the sum of inventory at the manufacturing, wholesale, and retail levels), which may affect the GDP outlook. In that event they can elicit a small market reaction. More often than not, however, this release goes unnoticed except by market economists.
3:00PM - Consumer Credit
* Importance (A-F): This release merits a D-.
* Source: Federal Reserve.
* Release Time: 15:00 ET on the fifth business day of the month (data for two months prior).
* Raw Data Available At: http://www.federalreserve.gov/releases/G19/Current/.
This monthly measure of consumer debt is volatile and subject to massive revisions. It is also released well after every other consumer spending indicator, including weekly chain store sales, auto sales, consumer confidence, retail sales, and personal consumption. For these reasons, the market almost never reacts to the consumer credit report.
Consumer credit is broken down into three categories: auto, revolving (i.e., credit card), and other. Since we already have indications on total consumer spending well before this release, there is little to be gained from learning what portion of spending was financed through acquisition of debt. Periods of strong spending can be accompanied by relatively weak credit growth and vice versa, so this measure fails even as a coincident or lagging indicator.
