Insider Trading - letzte 2 Monate 19:1, aber.....

verfasst von Popeye, 05.09.2002, 18:24

--> A quick glance suggests they are bearish, but closer analysis shows
confidence in the markets' future


The conventional measures of corporate
insiders' confidence in the stock market
are awfully discouraging. In the past two
months, executives and directors sold
shares in their companies more than three
times as often as they bought. Another
ratio of selling to buying is even uglier:
Insiders sold $19 of stock for every $1
they bought. Their actions seem to
forecast no end to bear-market pain.

But take heart. Insiders are actually turning
away from their punishingly bearish
conduct of the past two years. The key is
insider selling volume by itself, without comparison to buying
statistics. The increasing use of stock options for executive
compensation has distorted the insider buying numbers. When
insiders use options to acquire their company shares, those
transactions are not included in the buy data.

Sell volume has fallen dramatically this year, easing pressure on
the market. Average monthly insider selling over the past six
months was $3.3 billion, vs. the $5.9 billion rate in early 2000,
when the market was at its high, according to Thomson
Financial/Lancer Analytics. Also, the number of insider sell
orders is down 45% in the past two months, compared with
February and March, 2000.

If the trend holds, it will clearly benefit stocks, helping the
market at least to hold current levels. The decline in selling
carries an important message for investors: Even though
business has slowed, fewer people who are in the know think
their stocks are too high.

When insiders dump shares, stockholders can't help but worry
that they are missing some signs of coming trouble, says Eric
Bjorgen, analyst at Leuthold/Weeden Research. Bjorgen,
counting only big block transactions involving at least $1 million
of stock or 100,000 shares, says the dollar value of net insider
selling in the past 10 weeks is 0.8% of the value of the market,
down from a peak of 1.8% in May, 2000."I sure like what I see
so far," he says.

Another measure, registrations for public sale of restricted
stock, which includes shares held by venture capitalists, is
down to a monthly average of $7.4 billion, from $16.2 billion a
year ago."That's a big decrease in the supply of stock," says
Paul Elliott of Thomson Financial/First Call.

For decades, analysts have tried to divine the direction of
stocks by examining insider trades."Insiders certainly know
more about a company than any analyst," says David Coleman,
editor of Vickers Weekly Insider Report. Investors want to
know what insiders do, not just what they say.

Traditionally, analysts gauge insider sentiment by watching
ratios of selling to buying, whether comparing numbers of
transactions, numbers of shares, or dollar values. Tracking
buys has been considered critical. After all, insiders may have
personal reasons to sell, but they only buy big blocks of stock
if confident about the outlook.

Sell-buy ratios have been worthy indicators of past market
moves. A ratio calculated by Vickers showed a big shift to
insider selling in late 1986, before the 1987 market plunge, and
then a shift toward buying in 1988. Another version, kept by
Leuthold/Weeden, highlighted a market bottom in late 1990, and
sent a clear sell signal in May, 2000.

But as insiders increasingly use options to acquire shares,
counts of buys are understated, making sell-buy ratios less
reliable. When executives exercise options, their actions are not
added to tallies of buying--even if they continue to hold shares.
Analysts haven't found good ways to measure the significance
of exercises amid differences in option terms and taxes, says
Elliott. Yet when executives sell shares obtained with options,
the sells are counted. Analysts make adjustments, but they can
really only guess how much more selling than buying is normal
now.

Consider C.R. Palmer, chairman of driller Rowan Cos. (RDC )
and a veteran of 48 years in the oil business. In late June,
Palmer exercised options on 122,000 shares of stock, two
years before the options were set to expire. The purchase, with
the stock 30% off its 52-week high, increased his holdings by
27%. Palmer says he's having to pay about $9 a share in
income tax on the exercise. His move was a big bet by an
industry veteran that his stock will be higher a year from now.
Yet it wasn't counted among buys. No one knows how many
more bullish decisions similar to Palmer's go unrecognized.

CAUTION. To be sure, the lack of clear evidence of insider
buying is a nagging concern and is discouraging analysts from
forecasting a new bull market. Buying in July fell to $78 million,
the lowest amount since August, 1993."It tells me they don't
see the recovery as imminent," says Elliott. Says Lon Gerber,
research director at Thomson Financial/Lancer Analytics:
"There is a lot of caution. Nobody is making a commitment."

Energy execs are the exception. In July, insiders at Rowan,
Baker Hughes (BHI ), Anadarko Petroleum (APC ), Apache
(APA ), and Burlington Resources (BR ) made significant
purchases. Energy execs tend to be savvy traders, says Gerber.
At Anadarko, Executive Vice-President William D. Sullivan
bought 10,000 shares in July for about $56, or $20 below the
stock's 52-week high. The $560,000 purchase increased his
holdings by 20%. Sullivan says he is taking advantage of Wall
Street's underestimation of long-term demand for natural gas
and overestimation of supply.

Ideally, executives will soon make more purchases like
Sullivan's. That would give stocks a psychological lift.
Meanwhile, considering how tough the market has been,
investors can feel blessed that more insiders are holding tight to
their stocks.


By David Henry in New York
Quelle:BusinessWeek online

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gesamter Thread:

• Insider Trading - letzte 2 Monate 19:1, aber..... - Popeye, 05.09.2002, 18:24
  • könnte ein voreiliger Schluss sein - NaturalBornKieler, 05.09.2002, 18:52
    • Re: könnte ein voreiliger Schluss sein - Amanito, 05.09.2002, 20:15
      • Ergänzung - Amanito, 05.09.2002, 22:16
        • ach ja, schon von NaturalBornKieler erwähnt (owT) - Amanito, 05.09.2002, 22:17