(REUTERS) U.S. November insider stock sales hit 2-year high
By Joseph A. Giannone
NEW YORK, Dec 3 (Reuters) - Stock sales by top U.S.
corporate executives reached their highest level in more than
two years in November, a bearish signal at a time when the
stock market has been surging amid strong growth in the economy
and company earnings.
Last month corporate executives cashed in $4.5 billion
worth of their own companies' shares, up 43 percent from
October and nearly double the five-year monthly average,
according to Thomson Financial's Insider Research, which tracks
insider transactions. Meanwhile 3,680 executives from 1,592
companies participated in stock sales.
Both measures set five-year highs.
In recent weeks investors have been barraged by positive
economic data and better than expected third-quarter earning
reports, sustaining a rally in U.S. stocks. On Wednesday the
blue-chip Dow Jones Industrial Average and the broader Standard
& Poor's 500 Index reached 18-month highs, while the Nasdaq
Composite Index briefly broke the 2,000 barrier for the first
time in 22 months before pulling back.
Yet heavy insider sales could give investors pause, since
top executives and directors are perceived as knowing their
company's prospects best and therefore the figures can serve as
a gauge of executive confidence.
Technology company executives sold $1.3 billion of company
stock last month, the sector's highest level of profit-taking
activity since early 2001. Finance sector sales reached $802
million, its highest in five years, while healthcare executives
disposed of $580 million worth of shares.
Insider Research also observed that 56 companies so far in
the fourth quarter have exceeded their highest quarterly
volumes in at least five years. Among the companies were CBRL
Group <CBRL.O>, Genzyme General Corp. <GENZ.O>, Nike Inc.
<NKE.N>, Rite Aid Corp. <RAD.N> and Sears, Roebuck & Co.
<S.N>, Insider Research said.
Purchase activity last month also pointed to a lack of
confidence. Insider purchases rose 67 percent to $105 million
from October, well below the historical five-year monthly
average of $172 million.
Moreover $42.98 were sold for $1 of stock purchased last
month, the seventh straight month the sell-buy ratio remained
in "very bearish" territory -- well above the $20 mark. Still
that represents an improvement from October, when the ratio hit
$59, its highest level in at least a decade.
((Editing by Eric Walsh; Reuters Messaging:
joseph.giannone.reuters.com@reuters.net;+1 646 223 6184))
REUTERS
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<font size=1> (REUTERS) UPDATE 1-U.S. November insider stock sales
hit 2-year high </font>
(Adds more company examples)
By Joseph A. Giannone
NEW YORK, Dec 3 (Reuters) - Stock sales by top U.S.
corporate executives reached their highest level in more than
two years in November, a bearish signal at a time when the
stock market has surged amid strong growth in the economy and
company earnings.
Last month corporate executives cashed in $4.5 billion
worth of their own companies' shares, up 43 percent from
October and nearly double the five-year monthly average,
according to Thomson Financial's Insider Research, which tracks
insider transactions.
Meanwhile 3,680 executives from 1,592 companies engaged in
share sales. Both measures set five-year highs.
In recent weeks investors have been barraged by positive
economic data and better than expected third-quarter earning
reports, sustaining a rally in U.S. stocks. On Wednesday the
blue-chip Dow Jones Industrial Average and the broader Standard
& Poor's 500 Index reached 18-month highs, while the Nasdaq
Composite Index briefly broke the 2,000 barrier for the first
time in 22 months before pulling back.
Yet heavy insider sales could give investors pause, since
top executives and directors are perceived as knowing their
company's prospects best and therefore the figures can serve as
a gauge of executive confidence.
Technology company executives sold $1.3 billion of company
stock last month, the sector's highest level of profit-taking
activity since early 2001. Finance sector sales reached $802
million, its highest in five years, while healthcare executives
disposed of $580 million worth of shares.
Insider Research also observed that 56 companies so far in
the fourth quarter have exceeded their highest quarterly
volumes in at least five years. Among these companies were CBRL
Group <CBRL.O>, Genzyme General Corp. <GENZ.O>, Nike Inc.
<NKE.N>, Rite Aid Corp. <RAD.N> and Sears, Roebuck & Co.
<S.N>, Insider Research said.
Stock-buying activity last month also pointed to a waning
of confidence. Insider purchases rose 67 percent to $105
million from October, well below the historical five-year
monthly average of $172 million.
Moreover $42.98 were sold for $1 of stock purchased last
month, the seventh straight month the sell-buy ratio remained
in "very bearish" territory -- well above the $20 mark. Still
that represents an improvement from October, when the ratio hit
$59, its highest level in at least a decade.
Among those identified taking advantage of robust prices
were executives at Fortune Brands Inc. <FO.N>, which saw its
first insider sales since July and whose shares recently
reached an all-time high.
And six XM Satellite Radio Holdings <XMSR.O> executives
combined for the biggest quarterly sales volume and their first
disposals since late 2000. The company's shares surged 10-fold
in the past year, Insider Research said.
Fourth-quarter activity at credit card issuer Capital One
Financial <COF.N> reached record levels, continuing a trend of
increasing sales. Lee Enterprises Inc. <LEE.N> insiders posted
the biggest combined sale as its shares trade at record highs.
Meanwhile retailer Saks Inc. <SKS.N>, hovering near a
52-week high, saw its highest sales levels since 1999.
((Editing by Michael Miller; Reuters Messaging:
joseph.giannone.reuters.com@reuters.net;+1 646 223 6184))
REUTERS
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