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
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.