Die neuen Daten kommen am 10. Januar!
TECHWATCH
Watch insider buys to sway tech picks
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 12:09 AM ET Jan. 9, 2002
SAN FRANCISCO (CBS.MW) - If tech executives are still buying their companies' shares at these price levels, assume they know something about making money the rest of us don't.
One of the most important guides for helping to choose tech stock buys over the next few weeks could be insider-buying numbers. Companies need to turn in lists of recent insider trades to the SEC by Jan. 10. The files should provide
mounds of useful information going into next week.
Some tech directors have very good track
records of timing their stock buys ahead of
significant price moves. Watch them. If groups of
important insiders think shares are a bargain
even after big run-ups since September,
individual investors might want to think about
buying, too.
"It's pretty straightforward - you can be pretty
confident if a group of executives are writing
checks that they think their stock is
undervalued," said Lon Gerber, analyst with
Thomson Financial/Lancer Analytics in
Scottsdale, Ariz., who closely tracks insider
trades.
Gerber says there probably won't be the same
level of insider buying next week as in past
months. At that, most of the buying, he says,
will probably be in smaller-cap companies.
But the few buyers at these levels speak
volumes about where they think their shares are
headed in this grossly overvalued stock market.
The tech bubble is once again inflating. The
price-to-earnings ratio of Sun Micro's (SUNW:
news, chart, profile) shares is 174. A reasonable
level is a tenth of that. The market's most widely
traded stock, Cisco (CSCO: news, chart, profile)
doesn't even have a price-to-earnings ratio, due
to last year's losses.
Chip stocks had a great run since September, but shares of Micron Technology (MU: news, chart, profile), an unprofitable company, are now worth more than its entire industry.
Without droning on about valuations, assume that only a handful of companies, none of the above mentioned included, are worth their prices right now. Insider trading records can help pinpoint them.
It's no guarantee, but insider buys have offered clues in the past. As MarketWatch.com's Tho Calandra pointed out in a past column, Portal Software (PRSF: news, chart, profile) CEO John Little bought 800,000 of his company's shares in September for between 75 and 78 cents a share. Shares are now at $2.23.
A group of Covad Communications (COVD: news, chart, profile) insiders bought more than 1.5 million shares in late November, in a range of 95 cents to $1.05. Shares are now $2.98.
Entrust Inc. (ENTU: news, chart, profile) executives including CEO William Connor began nibbling at shares in November, when they were in the $5 to $7 range. Shares have since risen to $11.95.
Looking ahead to the upcoming numbers, Gerber says he wants to see if directors at New York's ImClone Systems (IMCL: news, chart, profile), a developer of cancer therapies, have recently purchased stock. The company's shares are now at $31 down from $71 in December.
One of ImClone's board members, David Kies, is tops at timing his stock purchases. He has seen shares rise from where he bought them on 18 out of 19 occasions. His average gain, six months out from each purchase, was 70 percent. Of note he sold 30,000 ImClone shares in October, grossing
$2.1 million
Gerber will also be watching Wilfred Corrigan, LSI Logic's chief executive. Corrigan made stock gains 11 out of the past 12 times he purchased LSI. His average gain was 48 percent, six months out from the purchases.
Shares of the Milpitas, Calif-based chip design company have yet to recover to their pre-trough price on Sept. 10.
Institutional investors spend millions annually for data on insider stock trades. You don't have to. CBS.MarketWatch.com gives away a good chunk of that data for free. Go to our Research and Tools page, enter a ticker into Stocks in a Box, then click Insider Trading. Go There.
Or, go where we get the data - ThomsonFN.com. You can search insider buys and sells by ticker, or by industry, or the largest buys over a particular time period.
Have a look. It's what many of the fund managers, analysts and strategists will be checking out next week.
Gruß Dr. Broemme
TECHWATCH
Watch insider buys to sway tech picks
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 12:09 AM ET Jan. 9, 2002
SAN FRANCISCO (CBS.MW) - If tech executives are still buying their companies' shares at these price levels, assume they know something about making money the rest of us don't.
One of the most important guides for helping to choose tech stock buys over the next few weeks could be insider-buying numbers. Companies need to turn in lists of recent insider trades to the SEC by Jan. 10. The files should provide
mounds of useful information going into next week.
Some tech directors have very good track
records of timing their stock buys ahead of
significant price moves. Watch them. If groups of
important insiders think shares are a bargain
even after big run-ups since September,
individual investors might want to think about
buying, too.
"It's pretty straightforward - you can be pretty
confident if a group of executives are writing
checks that they think their stock is
undervalued," said Lon Gerber, analyst with
Thomson Financial/Lancer Analytics in
Scottsdale, Ariz., who closely tracks insider
trades.
Gerber says there probably won't be the same
level of insider buying next week as in past
months. At that, most of the buying, he says,
will probably be in smaller-cap companies.
But the few buyers at these levels speak
volumes about where they think their shares are
headed in this grossly overvalued stock market.
The tech bubble is once again inflating. The
price-to-earnings ratio of Sun Micro's (SUNW:
news, chart, profile) shares is 174. A reasonable
level is a tenth of that. The market's most widely
traded stock, Cisco (CSCO: news, chart, profile)
doesn't even have a price-to-earnings ratio, due
to last year's losses.
Chip stocks had a great run since September, but shares of Micron Technology (MU: news, chart, profile), an unprofitable company, are now worth more than its entire industry.
Without droning on about valuations, assume that only a handful of companies, none of the above mentioned included, are worth their prices right now. Insider trading records can help pinpoint them.
It's no guarantee, but insider buys have offered clues in the past. As MarketWatch.com's Tho Calandra pointed out in a past column, Portal Software (PRSF: news, chart, profile) CEO John Little bought 800,000 of his company's shares in September for between 75 and 78 cents a share. Shares are now at $2.23.
A group of Covad Communications (COVD: news, chart, profile) insiders bought more than 1.5 million shares in late November, in a range of 95 cents to $1.05. Shares are now $2.98.
Entrust Inc. (ENTU: news, chart, profile) executives including CEO William Connor began nibbling at shares in November, when they were in the $5 to $7 range. Shares have since risen to $11.95.
Looking ahead to the upcoming numbers, Gerber says he wants to see if directors at New York's ImClone Systems (IMCL: news, chart, profile), a developer of cancer therapies, have recently purchased stock. The company's shares are now at $31 down from $71 in December.
One of ImClone's board members, David Kies, is tops at timing his stock purchases. He has seen shares rise from where he bought them on 18 out of 19 occasions. His average gain, six months out from each purchase, was 70 percent. Of note he sold 30,000 ImClone shares in October, grossing
$2.1 million
Gerber will also be watching Wilfred Corrigan, LSI Logic's chief executive. Corrigan made stock gains 11 out of the past 12 times he purchased LSI. His average gain was 48 percent, six months out from the purchases.
Shares of the Milpitas, Calif-based chip design company have yet to recover to their pre-trough price on Sept. 10.
Institutional investors spend millions annually for data on insider stock trades. You don't have to. CBS.MarketWatch.com gives away a good chunk of that data for free. Go to our Research and Tools page, enter a ticker into Stocks in a Box, then click Insider Trading. Go There.
Or, go where we get the data - ThomsonFN.com. You can search insider buys and sells by ticker, or by industry, or the largest buys over a particular time period.
Have a look. It's what many of the fund managers, analysts and strategists will be checking out next week.
Gruß Dr. Broemme
