Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.
Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at E*TRADE
Insider Rating |
Bullish
|
Business Description |
A leading online brokerage that's been significantly hurt by the global financial crisis. Also, the producer of those baby trader commercials. (You know what we mean.) |
Recent Price |
$1.46 |
CAPS Stars (Out of 5) |
**** |
Percentage of Shares Owned by Insiders |
16.94% |
Net Buying (Selling)* |
$198,045 |
Last Buyer (% Increase) |
Donna Weaver, director |
Last Seller (% Decrease) |
None over the prior 12 months |
Competitors |
Charles Schwab |
CAPS Members Bullish on ETFC Also Bullish on |
General Electric |
CAPS Members Bearish on ETFC Also Bearish on |
Bank of America |
Recent Foolish Coverage of ETFC |
E*TRADE Makes a Good Trade
|
Sources Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of July 29, 2009.)
*Open market sales and purchases only.
What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times, they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.
Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.
The Foolish view: Bullish
Banking has been bad business recently, but with the Dow soaring past 9,000, you'd think that stock and options trading volume was on the rise. If so, that'd be good news for E*TRADE and exchanges such as NYSE Euronext
So why are insiders buying? Perhaps because revenue is rising dramatically, up close to 17% in Q2. Once E*TRADE unwinds its worst assets, new deposits and higher trading volumes could fuel growth and healthy gains for investors.
"[E*TRADE] was one of the first companies to recognize their banking problems and work to resolve them," wrote CAPS investor outoffocus in June:
... They sold off some of their assets and focused on their core business. They obtained private financing before TARP was even thought of. Despite constantly being dogged by the media they launched an aggressive ad campaign to bring in more business. They introduced online trading into the smartphone world with [E*TRADE] Mobile. Just based on these efforts alone I would like this company to succeed
I concur -- but that's just my take. Do you agree? Disagree? Log into CAPS today and tell us how you'd rate E*TRADE.
And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here, or use the comments box below. I'll write this column as often as you, our readers, demand.
More of the inside scoop:
- Here's who I had my eye on last time.
- These earnings are hard to believe.
- Go ahead, punch your ticket to country-club riches.