Insiders Buy GE - Imagination at Work?
New York – The Wall Street Journal carried an article this
morning entitled “GE Insider Share-Buying Underwhelms”. The article discusses the purchase of stock
by insiders after the revelation that the company had underperformed in its
earnings report last Friday. GE stock
fell about 13% on the news, which is somewhat of a surprise in this era of
management earnings. Post earnings
report, three directors bought shares: 1) Chairman Michael Neal bought about
$1.0 million worth of stock (31,250 shares), Ralph Larsen bought 15,000 shares
and Robert Swieringa bout 1,000 shares.
The purchases really
amount to a very inconsequential amount of stock and can not be expected to
have had any direct effect on the share price. But the question is whether
there is a more subtle rationale.
Perhaps the insiders were trying to send a signal to the market, that
the stock had intrinsic value. Given the aforementioned information, it might
seem likely that the purchases had only signal content. But there is another
piece of news that raises questions for those that follow insider trading data.
CEO Jeffrey Immelt has also been buying stock, and in more impressive
quantities. In the fourth quarter and first quarter, he has purchased $4.6
million and $5.0 million respectively.
To the Insider analysts, this seems more than a confidence
booster, and they are watching closely to see if these purchases persist. If so
it might reflect a more substantial bet on the future of the company.
Insider trading analysts are a specialized group that
examines the trends and turning points in the share purchases of the insiders
to assess the future of the stock price of a company. In the article Ben
Silverman of InsiderScore in quoted as is Nicoloas Heymann of Sterne, Agee & Leach.
In our database we have 15 firms that specialize in insider
trading data and/or analysis, including 2 that cover European data, one that
covers Japan and the rest that follow North American data. Some of the firm names cannot be disclosed
given Integrity's agreements with them, but here is a list of firms which we can share
in the insider trading space:
Argus Vickers American Equity Research - UK
Directors Deals Limited – UK
Form4Oracle - US
Insider Insights – US
Insider Intel – US
InsiderScoop – US
InsiderScore- US
Muzea Insider – US
The Washington Service – US
As it indicates in the article, it will be interesting to
see whether there is any information signaling in the recent actions of the
insiders.
Posted at 09:48 am by Thomas Hutchinson
