The market has doubts about whether SGI will turn around. After 6 bad quarters in a row, who wouldn't. Maybe the insiders? I reviewed insider transactions for SGI and found some interesting things:
1. Ed McCracken CEO, sold 20k shares in Nov. 1993 (leaving 239k), 30k in Feb 1994 (leaving 429k), 30k in Aug 1994 (leaving 401k), 30k in feb 1995 (leaving 371k), and 60k in nov 1995 (leaving 298k). He has not sold since, indicating that he is accumulating any option shares which he recieved.
2. The CFO, Stanley Meresman, consistantly sold all his shares in 1993 to 1995, but hasn't sold since. April 94 sold 15k (leaving 3k), Oct 94 sold 30k (leaving 173 shares, not thousands), Feb 95 sold 13k (leaving 371 shares).
3. COO, Thomas Jermoluk also used to sell all his shares - Nov. 1993 sold 25k, (leaving 3k), Jan 94 sold 50k (leaving 6k), feb 94 sold 161k (leaving 7k), Oct 94 sold 100k (leaving 9k), Aug-sept 1996 sold 304k (leaving 11k). Since he sold all his shares as recently at last fall, he probably doesn't have many.
4. No significant insider buys (i.e. above 1k shares) until 4/23/97 when William M. Kelly, SR VP bought 25k and Robert Ewald Ex VP bought 50k shares. These were not bought on the market, however. On the other hand, a review of Mr. Kelly's past trades indicates that he is an astute trader.
5. Greatly reduced insider selling activity in 1997. In 1994 there were 51 sales totaling almost 2 million shares. In 1995 there were 35 sales totaling about 730,000 shares. In 1996 there were 6 sales totaling 700,000 shares. So far in 1997 there are four sales totaling less than 5,000 shares and purchases of 75,000 shares.
Conclusions: Perhaps due to falling stock prices the insiders have less option shares to sell. But whatever shares they have, they aren't selling them like they used to. In fact this year they are net purchasers.
What do you think? I expect good earnings this quarter. That was my initial expectation when I bought in - weak Q1, very strong Q2. Unfortunately I should have waited to buy until AFTER the weak earnings were reported. Then I'd be in at 12-13 or so........
Good luck,
Carl |
