"Jim, NMGC is trading at a discount to its peer group since releasing earnings for the quarter ending April '98. The Co. has increased its market share while improving margins, certainly an accomplishment, so why are nine insiders selling and why has the stock been trending down since earnings were released?"
Sergio -- I initially had the same concerns as you about insider selling. However, the last I checked (which was about a month ago), the insider sells were very small. When I did more research, I was told by those who closely follow the company that the principals systematically sell to supplement their salaries, which they have keep low to help NMGC establish itself as a dominant player in its market (which it has now done).
As for the down trend, the only explanation I can come up with is that NMGC got clobbered with the general massacre in the semiconductor sector. Fortunately, I sold at 18 1/2 on its way down into the 14's, although it's just now started to turn back up on very strong volume and closed at 16 on Friday. I've been buying in the 14's and 15's, and likely will pick up some more in the 16's.
Finally, keep in mind that around a month ago it was revealed that Fidelity Select Electronics was taking a major position in NMGC. This fund has been the top performer (of all funds over all categories) over the last several years, and other funds often follow FSE. Now that the semiconductor sector looks to have hit bottom, I suspect we will see heavy institutional buying for NMGC.
Hope this helps.
-- Jim |
