Insider Buying Remains Anemic
Somewhere in the US, insiders are buying their own company’s stock, though without the conviction of large dollar amounts and multiple buyers in the same firm.
Data from Thomson Reuters Stock Reports+ shows that the most insider buying for the past 13 weeks ending July 15th occurred in the technology and industrials sectors. Those dollar amounts were highlighted by large single buyers, compared to the multiple buyers that market bulls would prefer.
The $452 million put into the technology sector included $412 million in Hewlett-Packard (HPQ.N). Relational Investors principal and recent addition to the H-P board Ralph Whitworth, accounted for $407 million and another buyer the remaining $7 million.
The next most significant insider purchases were in the industrials sector, with $64 million of new money, of which Ecolab made up $56.8 million. That transaction was through an indirect purchase by Microsoft chairman and co-founder Bill Gates. The 919,000 share purchase appears to bring his indirectly holdings to 27.9 million shares. According to the total return chart using DataStream Professional Portfolio Analytics, Ecolab’s past five years have gained 60% while Microsoft and the S&P 500 are about flat. (Although not shown, Hewlett-Packard stockholders have lost 60% in the past five years.)
If you feel that insiders close to the pulse of corporate America may have a better feel for things than the average investor, then the rest of the buying taking place may not be enough of a catalyst to bring more investors into US equities.
It’s even less inspiring looking at the overall data: Of the total $659 million total insider buys in the past thirteen weeks, the past 4 weeks have contributed only $8.5 million of fresh money.