Investors hurt by the sharp slide in home-builder stocks might now wish they'd kept a closer eye on what industry executives were doing with their own holdings.
CEOs of three of the top eight U.S. home builders sold large amounts of stock last year and avoided some of the financial pain since the shares peaked, a review of regulatory filings for USA TODAY by Thomson Financial shows.
Such insider selling, even as the stocks were hitting highs and home builders were pumping out homes, underscores how executives are often the first to react to swift business changes, says Mark LoPresti of Thomson.
Executives often have much of their wealth tied up in their companies and are closely aware of shifts in their industry. They're acquainted not only with their business' health and outlook but also have an acute understanding of the value of their company's shares.
So concentrated selling, or buying, by insiders can be a cue for individual investors. "We don't know for sure what's in the hearts of insiders," LoPresti says. But in his opinion, "It was extreme activity."
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