Insider Buys and Sells: Weekly Wrap-Up
Monday, December 1, 2008 | Tycoon StaffThat'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 of insider buys and sells of $10 million or more. 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
Yahoo Inc. (YHOO)
Yahoo Director Carl Icahn has BOUGHT $66.96 million in YHOO stock.
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AutoNation Inc. (AN)
AutoNation insiders Cascade Investment LLC, Bill Gates' investment arm, and the Bill & Melinda Gates Foundation have BOUGHT $22.49 million in AN stock.
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Marchex Inc. (MCHX)
Marchex 10% Owner Par Investment Partners has BOUGHT $17.25 million in MCHX stock.
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Saks Inc. (SKS)
Saks 10% Owner Inmobiliaria Carso SA, one of billionaire Carlos Slim's companies, has BOUGHT $10.55 million in SKS stock.
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SELLS
ImClone Systems Inc. (IMCL)
ImClone Director and 10% Owner Carl Icahn has SOLD $816.87 million in IMCL stock.
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Covanta Holding Corp. (CVA)
Covanta Director Samuel Zell has SOLD $116.56 million in CVA stock.
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Public Storage (PSA)
Public Storage Director Wayne Hughes has SOLD $90.83 million in PSA stock.
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Hudson City Bancorp Inc. (HCBK)
Hudson City Bancorp Chairman, President & CEO Ronald Hermance has SOLD $44.06 million in HCBK stock.
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Boston Scientific Corp. (BSX)
Boston Scientific Directors John Abele and Peter Nicholas have SOLD $32.85 million in BSX stock.
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Silgan Holdings Inc. (SLGN)
Silgan Directors Greg Horrigan and Philip Silver have SOLD $14.84 million in SLGN stock.
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Fossil Inc. (FOSL)
Fossil President & CEO Kosta Kartsotis has SOLD $14.74 million in FOSL stock.
View Details Mark Your Economic Calendar: What's ahead for the week of December 1, 2008
Economic Calendar for the week of December 1 to December 5
Monday, Dec. 1
10:00 ISM: Institute for Supply Management
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.
This has not been a recession - yet. Third quarter real GDP will be near flat. Regardless of whether it is a slight increase, as we expect, or a slight decline, the fact remains that the US economy has been far stronger than generally perceived. This has been due in large part to strong exports and a resilient consumer. Gas prices, home prices, and higher unemployment didn't lead to a recession in the first three quarters of 2008. Of course, everyone knows that it "feels like a recession." This is in part because the stock market is down, and it is often taken as an indicator of the economy (even more so than GDP). GDP is also now likely to support the recession argument. We expect fourth quarter real GDP to decline. The outlook into 2009 is for a sluggish economy at best, but the specifics depend highly on how well the liquidity crisis on Wall Street is addressed. That remains highly uncertain.
Big Picture
This is a highly over-rated 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. That may well be what is happening at present with exports booming at large firms, but not necessarily across all manufacturing sectors. The current readings on the ISM manufacturing index are providing a more negative view of conditions than the actual industrial production data. 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 broad indications of trends.
Wednesday, Dec. 3
10:00 Non-Manufacturing ISM: Institute for Supply Management
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. 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.
Big Picture
The ISM surveys are highly overrated. They are simply surveys, and are unweighted by company size and the components are equally weighted. There have been many false reads from both the manufacturing and non-manufacturing surveys. Nevertheless, the October downturn in the survey undoubtedly reflects worsening busienss conditions that are likely to be reflected in the survey for at least several months.
Friday, Dec. 5
8:30 The 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 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 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.
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.
Big Picture
Employment conditions have worsened the past two months. Through August, payroll declines were moderate, and not at recessionary levels. The September and October declines were much larger and probably established a new trend. A large decline for payrolls is expected for November and employment conditions are not likely to improve for quite a few months.
Highlights
A large decline in payrolls is expected for November. New claims for unemployment have surged above 500,000 and recent data indicate that small businesses are now retrenching along with large corporations. The only question is the size of the decline. There will be excessive emphasis placed on a 50,000 variation in either direction, but given that 50,000 represents only a 0.04% move on total employment and given the large revisions often occur, the real point should simply be that employment declines right now are very large.
