Think shoes, Greg (sorry no link):
Revenge of the Old Economy:
Timberland insiders sell into shoemaker's rally
The Nasdaq had its worst year ever in 2000, as the vaunted New Economy tumbled from the stratosphere into the mud. Fittingly, old-fashioned shoes made for walking in the mud are selling like hotcakes -- and now insiders at that shoe company are cashing in on their newfound wealth.
Shares in Stratham, NH-based Timberland Co. TBL have soared seven-fold in the last 18 months, prompting selling by the Swartz family that controls 85% of the company's voting stock. Fifteen of the 20 most recent Timberland filings in the EDGAR Online database are Form 144s, filed to report insider trading.
"They're growing earnings a heck of a lot faster than they're growing revenue," says John Montgomery, manager of the Bridgeway Aggressive Growth mutual fund, whose largest holding is Timberland. The company was languishing in the mid 1990s, Montgomery said, but began to revive in 1997. "At first Wall Street just didn't believe them, but it looks like an awesome growth company to me."
In the first nine months of last year, according to the company's third-quarter SEC filing, Timberland's revenue spurted 18.7%, to $760.9 million, but operating profits leaped 83.3% to $83.2 million.
As the company's share price soared, so did insider selling. On Nov. 28, for example, the Sidney W. Swartz 1982 Family Trust sold 150,000 shares for $7.1 million. Sidney Swartz is the company's chairman and son of its founder, Nathan Swartz.
Sidney's son, Jeffrey B., is president and chief executive. On Nov. 2, 2000, he sold 25,000 shares for $1.2 million.
An entity described in SEC filings as Sidney & J. Swartz CRU reported Sept. 15 selling 128,900 shares for $5.4 million. On June 22 this same entity reported selling 90,000 shares for $7.0 million.
Timberland's signature product is a waterproof leather boot, developed by the company's founder, Nathan Swartz, in the 1960s. Sidney is credited with buttressing the Timberland brand name for outdoor footwear and extending it to other apparel.
Jeffrey, who was named to his current posts in 1998, helped thrust the company into the spotlight, both financially and in terms of social action, such as a "community store" concept the company backs in an inner-city neighborhood in Washington, DC, and hopes to expand to Detroit, Cleveland and Boston.
Montgomery first invested in Timberland in a socially responsible mutual fund he also manages.
Insiders haven't been the only recent sellers of Timberland stock in recent months. According to InsiderTrader.com, a subsidiary of EDGAR Online, FMR Corp., the parent of the Fidelity mutual fund family, the nation's largest, slashed its holdings of Timberland by 30.1% in last year's third quarter, although it still owned 5.3% of the company's common.
Wellington Management, a noted value investing firm, has been consistently taking profits in Timberland in recent quarters. Wellington owned nearly 830,000 Timberland shares at the start of 2000, but reduced that to less than 600,000 at the end of the second quarter, and only 191,000 shares at the end of the third.
The single largest mutual fund investor in Timberland, Nicholas Applegate Capital Management, however, has been adding to its stake. It bought nearly 840,000 shares in the third quarter, bringing its stake to 2.4 million, or 7.4% of those outstanding.
Nicholas Applegate is known for investing in high-growth companies. |
