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Centerline Holding Co. Message Board

  • nice_trader2 nice_trader2 May 16, 2007 9:37 PM Flag

    Insider buy huge

     
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    • do your research on his salary. the CEO is making 2.1MM USD

      certainly someone as bright as yourself would want to get the numbers right. also, explain that all the officers - not just the CEO - are investing in CHC.

      That to me is significant.

    • That's right the guy makes $3-$4 million a year and he is willing to invest $170,000 into his company's stock. That to me is not a significant investment.

    • CEO bought 10,000 shares on 5-11-07.

    • You would think that management would know the same thing? Management is not buying in any significant amount.

    • The directors must know something since they bought 10 mil of their company's stock in a month.

    • In my opinion, the Ignore User file is the best place for anyone who can't keep a civil tongue on his/her keyboard, whether or not he/she agrees with my viewpoint.
      ==============================================
      All the large stock purchasers by insiders recently listed apparently were on the open market. If they were acquired through exercising of stock options or other non-open market means, they would be listed as such.

    • I sent "jojo", the yoyo, to IGNOREland.

      Whatever jojo says, glad that I don't have to see it anymore.

    • I don't count as much significance to these insider buys as some for the following reasons:

      1-Management (insiders) does not hold a lot of stock. That is discomforting.

      2-Since they do not hold a lot long term, over time, they are selling what they are buying.

      3-Their price is lower than market giving the insiders an opportunity to flip the shares short term for a quick profit or as soon as they qualify as long term gains.

      4-Insider buys are often timed due to option expiration dates. If they don't buy, they lose the shares. Therefore, their decision is based on whether they think they can unload the shares at a price higher than purchase.

      For me, the best case here is that insiders don't think the price will be lower in the short term until they sell. That does not give me a lot of confidence.

      What would give me confidence is earnings improvement in the 2nd, 3rd, and 4th quarters.

      The only reason for me to buy more CHC on a dip is if that dip is unrelated to CHC, such as an overall market drop, or negative news in the mortgage industry that does not apply to CHC. I doubt that I will buy CHC on dips if the reason for the dip is related to events or performance at CHC. itself

      • 2 Replies to frisco1fred
      • I do not mean to be rude. However, insiders can get on the bus much more easily than they can get off. Directors and Offices have access to information not available to the market. Therefore the timing of when they can sell is highly restricted by regulation.

        Any way you slice it, multi-million dollar purchases are big and significant. Even $175k is very significant. In any case, the empirical research shows this is positive; usually very positive, nearly all the time.

        It is selling or option exercise, which contains very little market intelligence. Directors and offices sell options for all sorts of reasons unrelated to relative value. We all like to buy stuff. We all should diversify. I never take it as a positive but that is not the same as a negative signal. Now if they all do it together it is a different game.

        But, back to diversification, when officers and directors make open market buys two things are happening. First, due to regulation their holding are much less liquid than other owners. So, their holdings are actually worth less than investors whom can sell as they wish.

        Second, they are concentrating their wealth / income on their performance or job. Either one is enough to make a financial planner go absolutely nuts. Both together usually causes red-faced tantrums.

        The best managers insure their equity value is neither to high or to low. This is a wide range in practice, as none of us know the future. This is the best way for managers to signal the share price is low relative to intrinsic value.

        Also a final observation, there are managers out there whom buy a couple thousand shares so their firm will show up on screens. That is a very negative signal or so research shows.

        Good Fortune

      • I am sure you can probably understand this when I say - who the hell cares what you think? You think your posting some valuable advice here - we can all see your just cheerleading for your short....get lost