Stock is up over $25 today. So DK made about $7300 since yesterday. Actually, hearing that someone inside the company bought that many shares is a good sign-- for any company. It means that the CEO expects to make money from the stock.
Would you rather hear that he was selling his own shares?
In many, many cases, a CEO will buy shares in his own company in a public manner to induce confidence in the stock (or units in this case).
You hear about these types of things if a corporation had some type of significant catastrophe or loss (IIRC Michael Eisner bought quite a bit of Disney stock in the days or weeks after the death of Frank Wells).
So, while on the surface it looks all nice and cozy it may, in fact, be a precursor to some less than stellar news.
RatherGoodBear said: Stock is up over $25 today. So DK made about $7300 since yesterday. Actually, hearing that someone inside the company bought that many shares is a good sign-- for any company. It means that the CEO expects to make money from the stock. Would you rather hear that he was selling his own shares?
The entire market had its best day since 2003 thanks to a 50 basis point rate cut by the fed. And FUN's move happened at exactly the same time as the fed meeting; it simply moved with the market.
With a dividend around 8% at the time of the purchase, this is a great under the radar way for Dick to pay himself an additional $19,000 per year. This purchase leads me to believe that investors will continue to be rewarded through the distribution and the parks will suffer from cost cutting. Somebody has got to pay for those paramount parks...
There probably is some effect, if only because the stock typically exchanges around 100,000 units per day-- sometimes as little as 50,000. A purchase equal to 10% of the stock's entire trading day will have an effect.
BTW, since hitting bottom last Thursday, the stock has already gained $1.38 per unit, or almost 6%.
RatherGoodBear, yes, the purchase may have made a difference in Monday's price movement, but it likely had little to no effect in yesterday's movement. The purchase was made prior to the big run yesterday which had everything to do with the market and nothing to do with Kinzel.
Captain Hawkeye, we already knew that CF was not going to get taken over. Even when the rumors were floating, the price of the stock clearly reflected that the market did not think a deal would get done. And Kinzel's purchase does not make his confidence in the integration "obvious." It also doesn't mean that the integration itself is going well - based on the past few conference calls, Dick seems a to be in a bit of denial over the state of his company. Its the #1 reason I think he needs to go.
It's a common move for a corporate exec. I think Eisner purchased a ton of Disney shares as the was greasing the skids for his resignation. It probably leads to a nice chunk of change, but I also wonder if it's a way for someone to maintain a degree of control long after they've been removed from the picture? Eisner is one of Disney's largest shareholders which means his vote carries a lot of weight.
What matters about this particular stock is NOT that Kinzel purchased shares. What he did is absolutely nothing special....at all. It doesn't have ANY bearing on the stock. Granted, public sentiment (at least those interested in FUN) does count for something, but again Kinzel is not important to the value of the stock at this time. Not that anyone seems to care, but Darrel Anderson bought 16,500 shares the next day. Insiders buy and sell for a LOT of reasons, and not necessarily to instill confidence with their shareholders.
From a fundamental point of view, FUN has a terrible score with only 1 of 15 rankings being positive overall. Volume was high recently, because every stocks volume was high this week, with the fed dropping interest rates half a point.
Looking at FUN's prophet chart shows that the price is continuing a bearish run, and is continuing to bounce down from the 20 day moving average. Until we see a lot of volume on a positive day, this stock will continue to be a sideways loser. FUN has hit its price ceiling at $29.50 twice this year, in late January, and mid July. The only way you can really make money on this stock is to play bearish put options when the stock hits the 20 day moving average, and make money on the people that actually think it's going to make them long term money. If you trade, you'll see that Friday the stock had what's called a Tombstone doji. That means that it tried to break out, and yet couldn't, and ended up pretty close to its starting price at the beginning of the day. This is a very bearish signal. Look for confirmation (at least 2 days) before making a purchase, or selling your shares. The slow stochastics show it at a moment when something is going to happen, but at this time, it looks like another trip down.
When you see the stock continue to trend down, but the stock seems to bottom out at the same spot over and over is when you will be looking for a positive breakout. Until then, or if there is MAJOR news, or a big, big move on high volume, you're wasting your time.
BTW, there is some good news. On the industrial charts, the Recreational Sector has moved up in the past month from the very bottom to a score of 23 out of 99. This means it's a quarter of the way up the industrial money influx chart, which in laymans terms means industrial purchases are (maybe) starting to happen. If this happens, there will be money to be made as the stock will move up.
Good call, Jeff. Dividends are indeed half the battle. Just remember that buying and holding is rarely the best thing. Swings in the market dictate otherwise. The market is pretty much spot on in having trends that last 14-16 years. Right now, we're in year 5 of a sideways trend.