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Corporate Insiders Putting Cash On The Line
Corporate Insiders Putting their Cash on the Line
In the face of market weakness, it's telling to note the behaviour of corporate insiders. The current market pullback has produced both a decrease in insider selling and an increase in insider buying. And that's not the kind of behaviour one would ascribe to a lack of confidence. Corporate insiders, who, by definition, should have the best sense of their companies' fortunes, cut the number of shares they sold by better than half as the market fell from highs in mid-January.
If they're correct, these insiders are likely pointing to the most recent dip being a temporary profit-taking exercise, rather than a bona fide turn in trend. Below are several stocks that saw significant insider 'dip buying' over the last couple of weeks.
IN PICTURES: World's Greatest Investors
A Day to Buy Oil Shares
Director Robert Day bought 67,000 shares of oil and gas developer, McMoran Exploration Company (NYSE:MMR) this week in a trade worth more than $1 million. He follows on the heels of Director Suzanne Mestayer, who bought a month earlier, and investment gurus George Soros and T Boone Pickens, who bought 1.7 million shares collectively in the 3rd and 4th quarters of 2009. (Learn more about the greatest investors, see: The Greatest Investors).
MMR stock is up better than 200% in the last twelve months, outperforming the broad energy sector as represented by the PowerShares DB Energy Fund (NYSE:DBE), which turned in a 46% rise in the same period.
Micrel Inc. (NASDAQ:MCRL) co-founder Raymond Zinn ponied up nearly half a million dollars last week to buy his company's shares, while insiders Ray Wallin and Frank Schneider did the same with a more modest collective sum of about $140,000. Micrel designs and manufactures Integrated Circuits for use in digital and wireless communications.
Westport Innovations, Inc. (NASDAQ:WPRT) is a designer of environmentally friendly engines. Last week, insider Kevin Douglas bought roughly 250,000 shares for just under $3 million.
In the last 30 days, Ernest Horejsi purchased through his trust in excess of 500,000 shares of Boulder Growth and Income Fund, Inc. (NYSE:BIF), a closed end fund that focuses on REIT investments. Total proceeds on the ten separate purchases comes out in the neighbourhood of $3 million.
The Wrap
Confidence breeds confidence. If these insiders are prepared to lay down their cash as they did - when they did - it likely won't be long before individuals and institutions catch on and join in the buying. (Learn more about insider trading, see: Uncovering Insider Trading.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
In the face of market weakness, it's telling to note the behaviour of corporate insiders. The current market pullback has produced both a decrease in insider selling and an increase in insider buying. And that's not the kind of behaviour one would ascribe to a lack of confidence. Corporate insiders, who, by definition, should have the best sense of their companies' fortunes, cut the number of shares they sold by better than half as the market fell from highs in mid-January.
If they're correct, these insiders are likely pointing to the most recent dip being a temporary profit-taking exercise, rather than a bona fide turn in trend. Below are several stocks that saw significant insider 'dip buying' over the last couple of weeks.
IN PICTURES: World's Greatest Investors
A Day to Buy Oil Shares
Director Robert Day bought 67,000 shares of oil and gas developer, McMoran Exploration Company (NYSE:MMR) this week in a trade worth more than $1 million. He follows on the heels of Director Suzanne Mestayer, who bought a month earlier, and investment gurus George Soros and T Boone Pickens, who bought 1.7 million shares collectively in the 3rd and 4th quarters of 2009. (Learn more about the greatest investors, see: The Greatest Investors).
MMR stock is up better than 200% in the last twelve months, outperforming the broad energy sector as represented by the PowerShares DB Energy Fund (NYSE:DBE), which turned in a 46% rise in the same period.
Westport Innovations, Inc. (NASDAQ:WPRT) is a designer of environmentally friendly engines. Last week, insider Kevin Douglas bought roughly 250,000 shares for just under $3 million.
In the last 30 days, Ernest Horejsi purchased through his trust in excess of 500,000 shares of Boulder Growth and Income Fund, Inc. (NYSE:BIF), a closed end fund that focuses on REIT investments. Total proceeds on the ten separate purchases comes out in the neighbourhood of $3 million.
The Wrap
Confidence breeds confidence. If these insiders are prepared to lay down their cash as they did - when they did - it likely won't be long before individuals and institutions catch on and join in the buying. (Learn more about insider trading, see: Uncovering Insider Trading.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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