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Thursday, November 10, 2005

Insider Selling By Homebuilders

I haven't posted anything about the housing bubble lately. Also, if either of the jobs I've recently interviewed for pan out, we'll be moving, so , I guess I'm due. .

Here's an interesting fact (from Dallas Morning News Columnist Danielle Dimartino:
In the last six months, homebuilders have sold, on average, $347 for every dollar they've spent purchasing their own stock. Compare that to all industries, where insiders have sold $31 in stock for every dollar they bought.

Mr. LoPresti said July was the key month for homebuilder shareholders to watch what insiders were doing with their own shares.

"In July alone, homebuilding insiders liquidated 4.8 million shares of stock, the largest number in history, raising $333 million," Mr. LoPresti said.

The last time homebuilder insiders were this aggressive was May 1991, when they sold off 3.1 million shares in one month. This was followed by a 27 percent decline in homebuilder stocks over the next four month

Click here for the whole piece.

HT: Calculated Risk for the link.

As I've mentioned before, insider sales are typically much less informative than insider purchases. However, the magnitude of the selling is pretty impressive.

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