Insider Buys and Sells: Weekly Wrap-up
Monday, October 5, 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.
SELLS
American Financial Group (AFG)
Co-CEO & Co-President S. Craig Lindner SOLD $2.1 million in options. View details.
Ametek (AME)
CEO Frank S. Hermance SOLD $4.23 million in options. View details.
BlackRock (BLK)
President Robert Kapito SOLD $1.7 million in options. View details.
CarMax (KMX)
CAO Michael K. Dolan SOLD $2.7 million in options. View details.
Computer Sciences Corp. (CSC)
Chairman, President & CEO Michael W. Laphen SOLD $2.7 million in options. View details.
Del Monte (DLM)
COB, President and CEO Richard G. Wolford SOLD $2.2 million in options. View details.
FactSet Research (FDS)
CEO and Chairman Philip A. Hadley SOLD $4.5 million in options. View details.
SVP Kieran M. Kennedy SOLD $1.9 million in options. View details.
EVP Michael D. Frankenfield SOLD $2 million in options. View details.
Marvell Technology (MRVL)
VP, Chief Technology Officer Pantas Sutardja SOLD $1.6 million in shares. View details.
OpenTable (OPEN)
SVP, Sales, Michael E. Dodson SOLD $1.5 million in shares. View details.
CFO Matthew Roberts SOLD $1.5 million in shares. View details.
SVP, Operations, Joel T. Brown SOLD $1.1 million in shares. View details.
SVP, Engineering, Charles Norman McCullough SOLD $1.8 million in shares. View details.
President and CEO Jeffrey D. Jordan SOLD $2.8 million in shares. View details.
Smithfield Foods (SFD)
President and CEO C. Larry Pope SOLD $1.3 million in shares. View details.
Economic Calendar for the Week of Oct. 5-9
MONDAY, OCT. 5
10 a.m. Non-Manufacturing ISM: Institute for Supply Management
* Importance (A-F): This release merits an improved B-.
* Source: Institute for Supply Management
* Release Time: 10 a.m. Eastern 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 that 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.
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.
Highlights
* The August ISM non-manufacturing report met consensus expectations (48.0%) and grew 2.0 points to 48.4%. This was the 11th consecutive month the index fell below the 50.0% threshold and continues to signal a contraction in the service sector.
* There were some bright spots in the data: overall business jumped to 51.3% from 46.1%; new orders increased to 49.9% from 48.1%; employment rose to 43.5% from 41.5%; export orders rose to 54.0% from 47.5% and import increased to 49.0% from 47.5%.
* Inventory problems continue to exist as inventories dropped from 47.0% to 43% and inventory sentiment increased from 67.5% to 62.5%. Even though inventories have contracted for 12 consecutive months, firms still believe their inventory stock is too high. Expect inventories growth in the non-manufacturing sector to stall over the next few months.
* Prices jumped from 43.3% to 63.1%. The jump was similar to the price increase in the manufacturing sector and may give inflation hawks more evidence to suggest higher inflation rates in the near future. Our views have not changed and we believe inflation to continue to moderate through 2010 as the output gap slowly declines.
Key Factors
* It was expected that the service industry was still in contraction mode, but after the nice positive surprise from the ISM manufacturing index on Tuesday, there was strong hope the non-manufacturing sector show the beginning of an expansion phase.
Big Picture
* The market generally doesn't pay much attention to the services index because the service sector is less cyclical than the manufacturing sector. During the current recession, the service index held steady around 50.0% through September 2009 before bottoming at 37.4% in November 2008. Since then, the service index has slowly risen back to the upper-40s. In contrast, the manufacturing index, with the exception of January 2009, stayed below 50% from December 2008 through July 2009 and bottomed at 32.9% in December 2008.
FRIDAY, OCT. 9
8:30 a.m. International Trade
* Importance (A-F): This release merits a C-plus.
* Source: The Census Bureau and the Bureau of Economic Analysis of the Department of Commerce.
* Release Time: 8:30 a.m. Eastern around the 20th of the month (data for two months prior).
* Raw Data Available At: http://www.census.gov/foreign-trade/www/press.html
The trade report is most widely watched for trends in the overall trade balance. But trends in both exports and imports of goods and services bear watching as well. The export data in particular are important to watch for indications that a strengthening competitive position at home and/or strengthening economies overseas are boosting U.S. growth. Imports provide an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it is not particularly valuable for this purpose.
The volatility in the monthly trade balance can play an important role in GDP forecasts. Net exports are a relatively volatile component of GDP, and the trade report provides the only early clues to the net export performance each quarter.
Highlights
* The trade deficit widened to $32.0 bln in July from $27.5 bln. Consensus expected the deficit to grow to $27.3 bln. July exports grew $2.7 bln to $124.9 bln while imports grew $7.2 bln to $152.4 bln.
* The report is very encouraging. The consensus expected strong import growth in the automotive and petroleum sectors and limited or no change in all other sectors. Instead, the bulk of the import growth was in consumer goods ($1.7 bln), industrial supplies and materials ($1.4 bln), and capital goods ($1.3 bln).
* The auto sector didn't disappoint, as the Cash for Clunkers stimulus plan helped increase imports by $2.4 bln. However, the petroleum sector didn't produce much growth as imports rose only $0.7 bln.
* The growth in consumer goods was an unexpected surprise. Retail sales has been down for the last few months, and growth in consumer good imports would represent increased optimism that the consumer is going to rebound shortly.
* The export report was also very strong as automotive vehicles, parts, and engines ($1.3 bln), capital goods ($0.7 bln), industrial supplies ($0.4 bln), and consumer goods ($0.4 bln) provided strong growth.
Key Factors
* The last ISM report showed the manufacturing sector beginning to expand. The increase in demand for industrial goods and materials along with a jump in capital goods imports provides the first hard economic evidence that the ISM report is correct. We know from press releases that the auto sector is revving up for increased production, but it is unknown if other manufacturing sectors were a contributing factor into the increase in manufacturing input imports.
* Global demand does not look too robust, but, like the import data, the increase in sales of industrial supplies and capital goods signal a jump in global manufacturing production.
* Hopefully, the strong report carries over the next few months and we'll get a better feeling for how the U.S. is coping with the economic recovery.
Big Picture
* The trade deficit can be thought of as a Catch-22 situation for the US economy. A drop in the deficit has resulted from import demand declining at a faster rate than the decline in export demand. The result was an increase in GDP growth without any actual increase in output. The recent rise in the deficit was the result of both exports and imports growing, but with imports outpacing exports. We are now experiencing an increase in output, but GDP is negatively affected. The trade-off of more production for negative GDP growth is better than the reverse and we'll take the increasing deficit as a signal of a stronger economy.
Source: Briefing.com
