The Tycoon Report

Insider Buys and Sells: Weekly Wrap-Up

Monday, May 12, 2008 | Tycoon Staff

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.

Without further ado, below are is a summary of the insider buys and sells reported last week ...

BUYS

Autonation Inc. (AN)

Major investor Edward Lampert has purchased another block of shares worth approximately $20 million.

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Chelsea Therapeutics International, Ltd. (CHTP)

10% owner Josiah Austin has bought another $1.9 million in CHTP shares.

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Agilysys, Inc. (AGYS)

More than $2.2 million worth of AGYS was purchased by 10% owner Mak Capital One, LLC.

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Cleveland Cliffs Inc. (CLF)

Harbinger Capital Partners has added more than $78 million to their holdings of CLF.

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Jefferies Group, Inc. (JEF)

Leucadia National Corp. has added to their position in JEF to the tune of nearly $43 million.

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Bgc Partners, Inc. (BGCP)

10% owner Ronald Juvonin has bought more than $1.1 million in BGCP stock.

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Mosys, Inc. (MOSY)

Company director Carl Berg purchased just under $1.2 million shares of MOSY.

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Hearst Argyle Television Inc. (HTV)

Hearst Broadcasting Corp. has added more than $700,000 to their ownership in HTV.

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Reynolds American Inc. (RAI)

A director at the cigarette company has bought $541,581 worth of RAI stock.

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Firstmerit Corp. (FMER)

Company director Terry Haines has purchased just 24,000 shares of FMER for a total of nearly $500,000.

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Amylin Pharmaceuticals Inc. (AMLN)

Two institutional stockholders in AMLN have purchased a combined $11.6 million worth of company stock.

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Move Inc. (MOVE)

Nierenberg Investment Management has bought just over $11.5 million in MOVE stock.

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Nobel Learning Communities Inc. (NLCI)

Michael Milken has bought $2,650,000 worth of NLCI stock.

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Bristol Myers Squibb Co. (BMY)

CEO James Cornelius has purchased 100,000 shares of BMY for just under $2.3 million.

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SELLS

Robert Half International, Inc. (RHI)

Company director Fred Furth has sold more than $12 million worth of RHI stock.

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Aaron Rents, Inc. (RNT)

The CEO has sold nearly $10 million in RNT stock.

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Memc Electronic Materials, Inc. (WFR)

The President and CEO of WFR has sold $37.5 million worth of company stock.

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Kansas City Southern (KSU)

A senior VP at the railroad company has sold almost $1.7 million in KSU stock.

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Rex Energy Corp. (REXX)

Company director Lance Shaner has sold more than $70 million in REXX stock.

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Complete Production Services, Inc. (CPX)

L.E. Simmons has unloaded more than $24 million worth of CPX stock.

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Mastercard, Inc. (MA)

MA Vice Chairman Alan Heuer has sold about $18 million worth of company stock.

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Compellent Technologies Inc. (CML)

Two company directors along with one institutional investor have sold a combined $8.4 million-plus in CML stock.

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Exelon Corp. (EXC)

In addition to a small planned sale and exercise of options, CEO John Rowe has sold more than $3.8 million in EXC stock.

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United States Steel Corp. (X)

The Controller and two executive VPs have sold a combined $3.6 million worth of company stock.

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Marvel Entertainment, Inc. (MVL)

Company director Peter Cuneo has sold more than $14.5 million in MVL stock.

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Microsoft Corp. (MSFT)

Bill Gates has sold $39.3 million in Microsoft stock.

View Details Mark Your Economic Calendar: What's ahead for the week of May 12, 2008
Economic Calendar for the week of May 12 to May 16

Monday, May 12

2:00PM - Treasury Budget

Release Details

• Importance (A-F): This release merits a D.
• Source: U.S. Treasury Department.
• Release Time: 14:00 ET, about the third week of the month for the prior month.
• Raw Data Available At: http://www.fms.treas.gov/mts/index.html.

The monthly Treasury budget data follow strong seasonal patterns which produce huge month-to-month fluctuations in the deficit. These fluctuations tell us little about long term budget trends. To the extent that the market analyzes the monthly Treasury data, the focus is on year/year changes in receipts and outlays, since the data are not seasonally adjusted. Only in April, the most important month for tax inflows to the Treasury, does the market pay any attention to this report. The data can be predicted with reasonable accuracy by using daily data in the Daily Treasury Statement.


Tuesday, May 13

8:30AM - Import Prices ex-ag., Export Prices ex-ag.

Release Details

• Importance (A-F): This release merits an D.
• Source: Bureau of Labor Statistics, U.S. Department of Labor.
• Release Time: Typically in the second week of the month at 8:30 ET for the prior month
• Raw Data Available At: http://www.bls.gov/news.release/ximpim.nr0.htm.

Though not a market-moving release, export/import prices are a useful indication of inflation pressures created by changes in foreign exchange rates. For example, when the dollar is strong, import prices tend to be under downward pressure. If an item in Japan costs 500 yen and the exchange rate is 100 yen to the dollar, the US$ price $5. If the dollar then strengthens to Y120, the US$ price falls to $4.17. Because US exports must compete with foreign goods, there is also downward pressure on export prices when the dollar is strong.

Economists typically look at import prices excluding oil and export prices excluding agricultural. In each case, the category in question is excluded because prices for those items are volatile and the swings are unrelated to foreign exchange rates. Oil prices tend to swing in response to OPEC decisions, and agricultural prices are often affected by weather, neither of which say much about long-term trends in traded goods prices.

8:30AM - Retail Sales, Retail Sales ex-auto

Release Details

• Importance (A-F): This release merits an A-.
• Source: The Census Bureau of the Department of Commerce.
• Release Time: 8:30 ET around the 13th of the month (data for one month prior).
• Raw Data Available At: http://www.census.gov/svsd/www/advtable.html.

The retail sales report is a measure of the total receipts of retail stores. The changes in retail sales are widely followed as the most timely indicator of broad consumer spending patterns. Retail sales are often viewed ex-autos, as auto sales can move sharply from month-to-month. It is also important to keep an eye on the gas and food components, where changes in sales are often a result of price changes rather than shifting consumer demand.

Retail sales can be quite volatile and the advance reports are subject to rather large revisions. Retail sales do not include spending on services, which makes up over half of total consumption. Total personal consumption is not available until the personal income and consumption reports are released, typically two weeks after retail sales.

10:00AM - Business Inventories

• Importance (A-F): This release merits a C-.
• Source: The Census Bureau of the Department of Commerce.
• Release Time: 08:30 ET around the 15th of the month (data for two months prior).
• Raw Data Available At: http://www.census.gov/mtis/www/current.html.

The business inventories report includes sales and inventory statistics from all three stages of the manufacturing process (manufacturing, wholesale, and retail). But by the time it is released all three of its sales components and two of its inventory components have already been reported. Because retail inventory is the only new piece of information it contains, the market usually ignores the business inventories report.

However, sometimes retail inventories swing enough to change the aggregate inventory profile. This may affect the GDP outlook. When it does, the report can elicit a small market reaction.

The aggregate sales figures are dated and they say little about personal consumption. They are actually a good coincident indicator, but the market is far more interested in forward-looking statistics.

The inventory-to-sales (I/S) ratio measures the number of months it would take to deplete existing inventory at current sales rates. A relatively low (high) I/S ratio may mean that manufacturers will have to build up (draw down) inventory levels. Depending on the strength of final demand and the degree to which recent inventory changes have been intended or unintended, this can have an effect on the industrial production outlook. Note that this information is much more useful to market economists than it is to other market participants.

Wednesday, May 14

8:30AM - CPI, Core CPI

• Importance (A-F): This release merits a B .
• Source: Bureau of Labor statistics, U.S. Department of Labor.
• Release Time: 8:30 ET, about the 13th of each month for the prior month.
• Raw Data Available At: http://stats.bls.gov/news.release/cpi.toc.htm.

The Consumer Price Index is a measure of the price level of a fixed market basket of goods and services purchased by consumers. CPI is the most widely cited inflation indicator, and it is used to calculate cost of living adjustments for government programs and it is the basis of COLAs for many private labor agreements as well. It has been criticized for overstating inflation, because it does not adjust for substitution effects and because the fixed basket does not reflect price changes in new technology goods which are often declining in price. Despite these criticisms, it remains the benchmark inflation index.

CPI can be greatly influenced in any given month by a movement in volatile food and energy prices. Therefore, it is important to look at CPI excluding food and energy, commonly called the "core rate" of inflation. Within the core rate, some of the more volatile and closely watched components are apparel, tobacco, airfares, and new cars. In addition to tracking the month/month changes in core CPI, the year/year change in core CPI is seen by most economists as the best measure of the underlying inflation rate.

Thursday, May 15

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.

9:15AM - Capacity Utilization, Industrial Production

• Importance (A-F): This release merits a B-.
• Source: Federal Reserve.
• Release Time: 9:15 ET around the 15th of the month (data for month prior).
• Raw Data Available At: http://www.federalreserve.gov/releases/G17/Current/g17.txt.

The index of Industrial Production is a fixed-weight measure of the physical output of the nation's factories, mines, and utilities. Manufacturing production, the largest component of the total, can be accurately predicted using total manufacturing hours worked from the employment report. One of the bigger wildcards in this report is utility production, which can be quite volatile due to swings in the weather. Severe hot or cold spells can boost production as increased heating/cooling needs drive utility production up.

In addition to production, this monthly report also provides a measure of capacity utilization. Though the rate of capacity utilization is seen as a critical gauge of the slack available in the economy, the market does not completely trust this measure. Capacity is very difficult to measure, and the Fed essentially assumes that growth in capacity in any given year follows a straight line. One can therefore predict the capacity utilization rate quite accurately based on the assumption for production growth. The 85% mark is seen as a key barrier over which inflationary pressures are generated, but given revisions to these data and the difficulties with capacity measurement, the 85% mark should be viewed cautiously. It would be appropriate to look for corroborating inflation indications from commodity prices and vendor deliveries.

Friday, May 16

8:30AM - Housing Starts

• Importance (A-F): This release merits a B-.
• Source: The Census Bureau of the Department of Commerce
• Release Time: 8:30 ET around the 16th of the month (data for one month prior).
• Raw Data Available At: http://www.census.gov/const/www/newresconstindex.html.

Housing Starts are a measure of the number of residential units on which construction is begun each month. A start in construction is defined as the beginning of excavation of the foundation for the building and is comprised primarily of residential housing. Building permits are permits taken out in order to allow excavation. An increase in building permits and starts usually occurs a few months after a reduction in mortgage rates. Permits lead starts, but permits are not required in all regions of the country, and the level of permits therefore tends to be less than the level of starts over time.

The monthly national report is broken down by region: Northeast, Midwest, South, and West. Briefing recommends analyzing the regional data because they are subject to a high degree of volatility. The high volatility can be attributed to weather changes and/or natural disasters. For example, an unexpectedly high level of rain in South could delay housing starts for the region.