Watching corporate 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. Check out the action going on at Garmin
Insider Rating |
Moderately bullish (Strong levels of insider buying, but mostly at levels well below what we're seeing today.) |
Business Description |
Leading maker for global positioning systems used in vehicles. Also working on a GPS-enabled smartphone, the Nuviphone. |
Recent Price |
$26.39 |
CAPS Stars (Out of 5) |
*** |
Percentage of Shares Owned by Insiders |
43.73% |
Net Buying (Selling)* |
$1.54 million |
Last Buyer (% Increase) |
Thomas McDonnell, director |
Last Seller (% Decrease) |
None over the prior 12 months |
Competitors |
Nokia |
CAPS Members Bullish on GRMN Also Bullish on |
Google |
CAPS Members Bearish on GRMN Also Bearish on |
Starbucks |
Recent Foolish Coverage of GRMN |
5 Stocks Making Cash
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Sources Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of July 23, 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.
Personal holdings matter 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 = moderately bullish
Fools have an understandably mixed view of Garmin. My Foolish friend Rick Munarriz encourages you to throw the stock away, even as our Motley Fool Global Gains team still recommends holding shares.
Insiders have been buying in the last year, but mostly at levels well below what the stock trades for today. For example, President and Chief Operating Officer Clifton Pemble purchased 2,500 shares for $14.64 apiece in November 2008. He's sitting on close to a double as of this writing.
Yet there may still be an opportunity to profit on Garmin. The Obama administration's "Cash for Clunkers" program should put more new cars on the road. Any number of suppliers of auto gear could benefit, and new auto sales should help drive uptake of Garmin's global positioning systems and Sirius XM's
But that's my take. Do you agree? Disagree? Log into CAPS today and tell us how you would rate Garmin.
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 readers like you demand it.
Get more of the inside scoop with related Foolishness:
- Here's who I had my eye on last time.
- Why Garmin could be America's next top growth stock.
- But it's also more than that; it's also a dividend dynamo.