Insider buying has fallen to a new low as of the week ending January 20th. Aside from a number of sizable purchases by a director at Hersha Hospitality Trust total purchases were less $1MM. Insider selling, on the other hand, remains high with the weekly total coming to $255.75MM. With earnings continue to show few signs of sustainability and organic growth it’s not surprising that corporate insiders continue to express little faith in their own shares via the use of personal money.
We’re less than 15% of the way into earnings season, but the numbers are well above estimates. 76% of firms have outperformed revenue estimates with 78% of all companies topping bottom line estimates. The organic growth remains in question, however, as cost cuts continue to be the primary reason for the outperformance. Meanwhile, full year 2009 revenues are likely to decline 14% year over year while 2010 estimates are calling for low mid single digit revenue growth – not exactly a “strong recovery”. It’s likely that corporate insiders will remain skeptical of the rally until they begin to see some real signs of sustainable organic growth in their income statements. As of now, signs of a sustained rebound in earnings and revenues remain mixed.
Notable selling – Corporate insider at Tiffany’s have been very busy in recent weeks:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.