Insider buying at 8-year low in Q2

Car Key Boi

Well-known member
from CBS marketwatch...

Corporate executives sold $6.9 billion in stock during the second-quarter -- the highest level in one year -- while buying slumped to an eight-year low, according to Thomson Financial.

Quarterly buying totaled $270 million, its lowest point since the third quarter of 1995. Executives bought only $69 million worth of stock in June, down 45 percent from May's $126 million total, marking the lowest monthly level of purchasing in six years.

The bearish sentiment suggests corporate insiders aren't betting on an economic recovery later this year and are cashing in their chips amid the stock market's steady three-month run-up.

"The selling is not as troubling as the buying," said Kevin Schwenger, insider research analyst at Thomson Financial. "The buying is so anemic."

While insider selling vastly outpaced buying, the nation's chief executives did become more upbeat about the prospects for the U.S. economy in the second quarter, according to the Conference Board's measure of business confidence.

The measure rose to 60, an increase over 53 in the first quarter, according to a report released Monday.

Not all executives locked in profits. Notable buying occurred at Kroger Corp. (KR: news, chart, profile), A.G. Edwards (AGE: news, chart, profile), LSI Logic (LSI: news, chart, profile) and Sylvan Learning Systems (SLVN: news, chart, profile).

Robert Beyer, a Kroger director, made the grocery chain's largest insider purchase in over three years. Beyer bought 25,000 shares worth $420,690.

At A.G. Edwards, Paul Pautler, director of investment banking, made the largest ever insider purchase at the brokerage house, buying 20,000 shares worth $678,480. He had previously sold 3,868 shares for $170,772 in January 2002.

In June, selling abated with insiders unloading $2.1 billion worth of stock, a 40 percent decrease from May, when stock sales reached their highest level this year.

Selling was concentrated in the health care, technology and gaming sectors.

Mandalay Resort (MBG: news, chart, profile) CEO Michael Ensign sold over 1 million shares worth $35.5 million, while five insiders at Harrah Entertainment (HET: news, chart, profile) dumped 269,910 shares for $11.2 million.

Patterson Dental (PDCO: news, chart, profile) insiders fulfilled the largest consensus group sale in one year, unloading stock worth $9.3 million.

Elsewhere, executives and directors at Hovnanian Enterprises (HOV: news, chart, profile) took advantage of the homebuilder's skyrocketing stock price. Six sales were consummated, collectively worth $37 million.
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