Top Execs Selling: Is Something Up?; Gates, Other Get "Money Off The Table"

Top Execs Selling: Is Something Up? ; Gates, Others Get 'Money Off the Table'

http://www.blackenterprise.com/yb/yb...lackenterprise

2006-12-08

By DANIEL HAUCK, BLOOMBERG NEWS

NEW YORK Stock sales by America's corporate chieftains exceeded purchases last month by the widest margin since 1987, suggesting that they don't share the confidence of investors who sent the Standard & Poor's 500 Index to a six-year high.

Executives including Microsoft Corp.'s Bill Gates, Google Inc.'s Eric Schmidt and Kohl's Corp.'s William Kellogg in aggregate sold $63.18 worth of shares for every $1 they bought in November, according to an analysis by Bloomberg of data from the Washington Service. That's the highest since at least January 1987.

"They're pretty savvy market guys," said Wayne Wilbanks, who oversees about $1.2 billion as chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Va. "They see things are slowing down, and they're like, 'Man, I'm taking some money off the table.' "

Advances by Microsoft, Google and Kohl's have helped push the S&P 500 up 13 percent this year. The index, which closed this week at a level not seen since November 2000, may retreat 9 percent within the next six months, according to Wilbanks.

Stocks have rallied even as analysts forecast that a streak of average profit growth above 10 percent for S&P 500 companies will end this quarter. The U.S. economy expanded at a 2.2 percent annual rate in the third quarter, down from the 5.6 percent pace in the first quarter.

U.S. securities laws require company executives and directors to disclose stock purchases or sales within two business days. Investors such as Wilbanks follow insiders' trading, on file at the U.S. Securities and Exchange Commission, for clues about the prospects for companies.

Insiders sold $8.4 billion in shares last month, according to data compiled from SEC filings by the Washington Service, a research firm that tracks such transactions. Buying was almost $133 million, for a sell-buy ratio of 63.18.

That ratio surpassed a previous high of 62.76 reached in July 2005. The S&P 500 declined 2.2 percent from August through October 2005.

Microsoft ranked first among U.S. companies, with $594.2 million in sales by insiders in November.

Gates, the Redmond, Wash.-based company's chairman, sold 20 million shares for $581.1 million. The number of shares sold matched the total Gates sold in November 2005, February 2006, and the July- to-August period of this year.