Insider Activity Among Retailers: Part I

It's often curious to see a cluster of insider buying or selling in the same industry. This herd mentality can often signal that an entire group is overvalued or undervalued.

But what does it mean when some industry insiders are selling even as some are buying? Retail stocks are providing just such a mixed signal right now.

To be sure, the economy is throwing off all kinds of mixed signals, so the conflicted insider signal seems consistent with all the uncertainty. That said, certain retailers are seeing buying clusters while others are seeing selling clusters, which tells you that the company-specific outlook is more important than the industry outlook right now.

In this two-part article, I'll scope out both sides.

First, the bullish retail calls. In the table below, note that insiders have been accumulating shares in the open market, or by exercising options and not selling them.

Notably, this table excludes any stocks that have also seen insider selling, either through 10b5-1 plans, or complete sales of option exercises. After all, a company's insider profile can hardly be considered bullish if there is conflicting data.

At the top of the list in terms of dollar value: AutoNation (AN Quote - Cramer on AN - Stock Picks), where Eddie Lampert doled out a stunning $58.6 million in the past two weeks. Dollar value is the usual proxy for importance most investors use to determine if an insider trade is significant, and I usually have to be a buzz kill by reminding people that it is only one metric to consider.

Insider Buying at Retailers
Company	Ticker	Transaction Value	# Shares Traded	Latest Transaction	Average Transaction Price	Recent Price	# Of Insiders	Title(s)	Transaction Types
AutoNation	AN	$58,607,455	5,740,282	8/4/2008	$10.21	$11.87	2	BO,DIR	B
Saks	SKS	$12,424,406	1,298,500	7/14/2008	$9.57	$10.56	1	BO	B
Great Atlantic & Pacific Tea	GAP	$1,731,480	105,000	8/5/2008	$16.49	$16.38	2	BO	B
Hanesbrands	HBI	$1,719,240	79,000	8/4/2008	$21.76	$24.80	5	CEO,DIR,GC,PR,SEC,SO,VP	B
Rite Aid	RAD	$1,487,576	1,486,750	7/14/2008	$1.00	$1.34	3	CB,CEO,DIR,PR	B
Dick's Sporting Goods	DKS	$1,220,507	70,000	7/11/2008	$17.44	$19.15	2	BO,CB,CEO,DIR,PR	B
Luby's	LUB	$681,114	112,400	7/7/2008	$6.06	$6.96	2	BO,CEO,COO,DIR,PR	B
Staples	SPLS	$662,746	49,500	7/22/2008	$13.39	$24.47	2	GC,PR,VP	OB
Cabela's	CAB	$349,895	31,360	8/5/2008	$11.16	$11.10	2	DIR,VP	OB,B
Asbury Automotive Group	ABG	$311,278	30,000	8/4/2008	$10.38	$12.22	2	CEO,CFO,DIR,PR,VP	B
Charming Shoppes	CHRS	$246,580	55,000	7/11/2008	$4.48	$5.84	3	CB,CEO,DIR	B
American Eagle Outfitters	AEO	$242,445	19,500	7/14/2008	$12.43	$14.22	2	DIR,VP	B
Pier 1 Imports	PIR	$220,230	64,000	7/8/2008	$3.44	$3.90	6	CEO,DIR,PR,VP	B
Transaction Types: B=Open-Market Buy; OB=Option-Related Buy Titles: BO=Beneficial Owner of 10% or more of a company's shares; CB=Chairman; CEO=Chief Executive Officer; CFO=Chief Financial Officer; COO=Chief Operating Officer; DIR=Director; GC=General Counsel; PR=President; SEC=Secretary; SO=Sales and/or Marketing Officer; VP=Vice President

For instance, a knock on Lampert's bullishness is that he has been buying AN all the way down. He has hardly been a sage about calling this stock's bottom. But the high dollar value in Lampert's case is part and parcel of what makes his recent trades significant.

« Previous Page

1 2 3

Next Page »