Executives are selling off their company's stock at a record pace
Corporate insiders are dumping stock in their companies at a rate not seen in 10 years.
With September not yet over, stock sales by company executives reached $5.7 billion, according to data from TrimTabs Investment Research -- the highest September in a decade. August's $10.3 billion in insider sales also reached a 10-year record.
At the same time, stock buybacks are roaring ahead, pumping up U.S. share prices to new heights. Companies this year have announced $827 billion in spending to purchase their own shares -- well above the buybacks that took place during all of 2007, which set the previous annual record.
"Insiders have been committing lots of money for stock buybacks, and they're not doing buybacks because they think stocks are cheap. They're doing to it to pump up the stock so they can sell it," said David Santschi, director of liquidity research at TrimTabs.
Some investors like buybacks because they boost the value of the rest of the company's stock. They also bolster top executives' pay, much of which comes in the form of shares. But they're a purely financial play that don't improve a company's position in the long term, the way investing in equipment or in hiring might.
"Stock buybacks have seemed to be the main use of the corporate tax savings this year. Acquisitions haven't been particularly high, and we're not seeing much wage growth," Santschi added.
TrimTabs' figures underestimate the true amount of corporate insider activity, Santschi noted, because only certain insiders -- a company's highest-ranking executives or directors, as well as investors who hold more than 10 percent of the stock -- are required to disclose stock sales. So nonexecutive employees who sell stock aren't included in this measure.
Buybacks have come under scrutiny of late, with Securities and Exchange Commissioner Robert Jackson calling them out in a recent speech. "We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve," he said. "Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense." In June, a group of senators asked the SEC to review its buyback rules.
Said Santschi: "Insiders are doing one thing with their own money, and another thing with shareholders' money."
Executives are selling off their company's stock at a record pace
Corporate insiders are dumping stock in their companies at a rate not seen in 10 years.
With September not yet over, stock sales by company executives reached $5.7 billion, according to data from TrimTabs Investment Research -- the highest September in a decade. August's $10.3 billion in insider sales also reached a 10-year record.
At the same time, stock buybacks are roaring ahead, pumping up U.S. share prices to new heights. Companies this year have announced $827 billion in spending to purchase their own shares -- well above the buybacks that took place during all of 2007, which set the previous annual record.
"Insiders have been committing lots of money for stock buybacks, and they're not doing buybacks because they think stocks are cheap. They're doing to it to pump up the stock so they can sell it," said David Santschi, director of liquidity research at TrimTabs.
Some investors like buybacks because they boost the value of the rest of the company's stock. They also bolster top executives' pay, much of which comes in the form of shares. But they're a purely financial play that don't improve a company's position in the long term, the way investing in equipment or in hiring might.
"Stock buybacks have seemed to be the main use of the corporate tax savings this year. Acquisitions haven't been particularly high, and we're not seeing much wage growth," Santschi added.
TrimTabs' figures underestimate the true amount of corporate insider activity, Santschi noted, because only certain insiders -- a company's highest-ranking executives or directors, as well as investors who hold more than 10 percent of the stock -- are required to disclose stock sales. So nonexecutive employees who sell stock aren't included in this measure.
Buybacks have come under scrutiny of late, with Securities and Exchange Commissioner Robert Jackson calling them out in a recent speech. "We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve," he said. "Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense." In June, a group of senators asked the SEC to review its buyback rules.
Said Santschi: "Insiders are doing one thing with their own money, and another thing with shareholders' money."
WALMART SOUNDS THE ALARM: Trump's trade war will hit Americans hard
Will Martin
Sep. 21, 2018, 7:26 AM
Walmart sent a letter to the Trump administration about two weeks ago asking it to reconsider new tariffs on $200 billion worth of Chinese goods. In a letter to US Trade Representative Robert Lighthizer seen by Business Insider, the retailer reportedly said the immediate impact of the fresh tariffs "will be to raise prices on consumers and tax American business and manufacturers." The letter did not succeed, with the tariffs announced this past Monday.
Walmart, the largest US retailer, is sounding the alarm on President Donald Trump's trade war, saying it is "very concerned" about the impacts the newly announced tariffs may have on American consumers.
In a letter to US Trade Representative Robert Lighthizer seen by Business Insider, the company — which employs 2.3 million people worldwide, including 1.5 million in the US — said the immediate impact of the fresh tariffs "will be to raise prices on consumers and tax American business and manufacturers."
"As the largest retailer in the United States and a major buyer of U.S. manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the U.S. economy as a whole," Walmart wrote.
The letter — sent about two weeks ago — Walmart asked Lighthizer and the Trump administration to reconsider putting tariffs on Chinese-made consumer goods including Christmas lights, shampoo, dog food, luggage, mattresses, handbags, backpacks, vacuum cleaners, bicycles, cooking grills, cable cords, and air conditioners.
The letter did not achieve that goal, with the administration pushing forward earlier this week with the imposition of tariffs on $200 billion worth of Chinese goods, affecting more than 5,000 products. When those tariffs are implemented, tariffs, which function as taxes, will have been imposed on roughly half of US imports from China as part of the Trump administration's move to pressure China into changing some of its trade practices.
"For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies," Trump said in a statement on Monday.
"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices."
He added: "As president, it is my duty to protect the interests of working men and women, farmers, ranchers, businesses, and our country itself."
In its letter, Walmart also warned of the ways businesses could deal with the tariffs. It is effectively a choice between increasing prices for customers or taking a hit to their profits by absorbing the increased costs themselves.
"Either consumers will pay more, suppliers will receive less, retail margins will be lower, or consumers will buy fewer products or forego purchases altogether," Walmart said.
Here's a timeline of the US-China trade war so far: •March 1: President Donald Trump announces tariffs on all imports of steel and aluminum, including metals from China. •March 22: Trump announces plans to impose a 25% tariff on $50 billion worth of Chinese goods. China announces tariffs in retaliation to the steel and aluminum duties and promises a response to the latest US announcement. •April 3: The US trade representative announces a list of Chinese goods subject to the tariffs. There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs. •April 4: China rolls out a list of more than 100 US goods worth roughly $50 billion that are subject to retaliatory tariffs. •May 21: After a meeting, the two countries announce the outline of a trade deal to avoid the tariffs. •May 29: The White House announces that the tariffs on $50 billion worth of Chinese goods will move forward, with the final list of goods released June 15. The move appears to wreck the nascent trade deal. •June 15: Trump rolls out the final list of goods subject to new tariffs. Chinese imports worth $34 billion would be subject to the new 25% tariff as of July 6, with another $16 billion worth of imports subject to the tariff at a later date. China retaliates with an equivalent set of tariffs. •June 18: Trump threatens a 10% tariff on another $200 billion worth of Chinese goods. •July 6: The first tranche of tariffs on $34 billion worth of Chinese goods takes effect; China responds in kind. •July 10: The US releases an initial list of an additional $200 billion worth of Chinese goods that could be subject to a 10% tariff. •August 1: Washington more than doubles the value of its tariff threats against Beijing, announcing plans to increase the size of proposed duties on $200 billion worth of Chinese goods to 25% from 10%. •August 3: China says it will impose tariffs of various rates on another $60 billion worth of US goods if Trump moves forward with his latest threat. •August 7: The US announces that the second tranche of tariffs, which will hit $16 billion worth of Chinese goods, will go into effect on August 23. •August 23: The US imposes tariffs on another $16 billion worth of Chinese goods, and Beijing responds with tariffs on $16 billion worth of US goods. •September 7: Trump says the tranche of tariffs on $200 billion worth of Chinese goods is coming "soon" and threatens to impose tariffs on another $267 billion worth of Chinese goods. •September 17: Trump announces 10% tariffs on $200 billion worth of Chinese goods, saying China has "been unwilling to change its practices." •September 18: China says it has "no choice" but to retaliate to the fresh tariffs "to safeguard its legitimate rights and interests." It announces tariffs on $60 billion worth of US goods sent to China.
99% of Walmarts goods are made in China, bro. Do you not think they are going to disagree with the tariffs no matter what?
Just about all retailers are dealing with this. One of my clients is trying to figure out how to show the 20% tariff when selling products in order to convey to the customer the prices went up (some in the neighbourhood of 20% beginning next year) due to tariffs and not just because they were raised by the retailer. Obviously, this can be baked into the price, but when something goes from 200 to 240 it's going to raise some eyebrows of a lot of customers. This is going to be a mess for retailers and not good for consumers IMO.
99% of Walmarts goods are made in China, bro. Do you not think they are going to disagree with the tariffs no matter what?
But we do not have the means to make this stuff, and it was on NPR a couple days ago that Walmart just cant go to the next low wage country and say "Christmas is coming and match their price and we need billions of dollars of stuff, start ramping up production." There are not many places including unfortunately us that can make this stuff in the quantities Walmart and others need, so they either have to eat the tariff or pass it on to the consumer.
99% of Walmarts goods are made in China, bro. Do you not think they are going to disagree with the tariffs no matter what?
But we do not have the means to make this stuff, and it was on NPR a couple days ago that Walmart just cant go to the next low wage country and say "Christmas is coming and match their price and we need billions of dollars of stuff, start ramping up production." There are not many places including unfortunately us that can make this stuff in the quantities Walmart and others need, so they either have to eat the tariff or pass it on to the consumer.
We should, as good citizens, put a sign on every Walmart store door... “trump’s trade policies have caused our prices to rise. Our billionaire family, the Walton’s, are passing this cost down to you, our customers. Thank you for your continued patronage....and likely your trump vote.”
It’s be the responsible, educational, thing to do.
99% of Walmarts goods are made in China, bro. Do you not think they are going to disagree with the tariffs no matter what?
Just about all retailers are dealing with this. One of my clients is trying to figure out how to show the 20% tariff when selling products in order to convey to the customer the prices went up (some in the neighbourhood of 20% beginning next year) due to tariffs and not just because they were raised by the retailer. Obviously, this can be baked into the price, but when something goes from 200 to 240 it's going to raise some eyebrows of a lot of customers. This is going to be a mess for retailers and not good for consumers IMO.
I have been getting letters all week. I got one from Acuity Lighting a couple days ago. They were expecting a 6% increase on 10/15. My lighting rep called me couple days ago and said that that 6 percent now is 16% on all lighting, controls and other related products as the result of the Section 301 tariffs announced by the US Trade representative effective 9/24/18. They also said that the USTR has indicated that the tariffs will increase to 25% on 1/1/19, so at this point expect another additional price increase on 1/1/19.
Just 5 minutes ago we got a letter from Square D saying that their pricing will go up 15% on 10/15/18.
Also, they also told us that any project we currently have that we are bidding or negotiating, they will not hold pricing-they have to raise pricing.
99% of Walmarts goods are made in China, bro. Do you not think they are going to disagree with the tariffs no matter what?
But we do not have the means to make this stuff, and it was on NPR a couple days ago that Walmart just cant go to the next low wage country and say "Christmas is coming and match their price and we need billions of dollars of stuff, start ramping up production." There are not many places including unfortunately us that can make this stuff in the quantities Walmart and others need, so they either have to eat the tariff or pass it on to the consumer.
You are right, we do not have the means to make goods that we need to here, which is sad
In other words, Americans will be spending their tax cuts and THEN SOME in the coming holiday season to compensate for the Trump tariffs?!!!
Say it ain't so!
And when we win the tariff war it will be worth it. I would rather pay more to better the country by paying more for goods, than pay more in taxes where I don't know where that money is going. . . .
We were able to pay very well in the 70's and 80s for our own goods and pay more than a decent wage. Guys made plenty out the mill in those years, and we bought American. Why is that now the prices all shot up, even though we are importing from china paying little? makes you think.
No, it really doesn't. China has grown from basically a third world country to a manufacturing giant during that time. In the 70's China could not have provided the goods it has since the 90's. As their nation has progressed, all that has changed.
I don't feel anyone who objectively looks at the progress that China has made as a manufacturer from the 70's to the current day could possibly make an argument that you can compare those two time frames.
Let's look at the reality of the situation. I tried my best to buy American. I bought Levi, Carhartt, Redwing, Converse and many other American goods. ALL of those have moved their manufacturing to China. During the time frame you referenced such quality clothing could not have been manufactured in China.
As the decades have changed, so have the circumstances.
Intoducing for The Cleveland Browns, Quarterback Deshawn "The Predator" Watson. He will also be the one to choose your next head coach.
Why did the manufacturing move to china? because the flower child's didn't want manufacturing companies in America and the ideology of the left and their policies favored to do so.
Why did the manufacturing move to china? because the flower child's didn't want manufacturing companies in America and the ideology of the left and their policies favored to do so.
Lol right! Greedy CEO’s like Trump offshored manufacturing in the 70’s 80’s and 90’s. Your boy is the worse culprit.
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." Thomas Jefferson.
Why did the manufacturing move to china? because the flower child's didn't want manufacturing companies in America and the ideology of the left and their policies favored to do so.
See, we started out having an intelligent discussion and then you post something like this?
Let me tell you something. During the early 80's I roofed the West Point Pepperell cotton mill manufacturing plants and offices throughout Georgia and Alabama. There were no flower children there. There was nobody happy that American corporations decided to move their manufacturing overseas.
Why would you try to make some outlandish claims about blaming the left and flower children for something that squarely lies on the shoulders of corporate America? If you actually wish to continue a constructive conversation, please respond. If you're going to make up stupid BS like Trump does, don't bother.
Intoducing for The Cleveland Browns, Quarterback Deshawn "The Predator" Watson. He will also be the one to choose your next head coach.
The fact the left and their policies putting restriction after restriction on business and corporations had nothing to do with it.....ok pal.
the europeans put restrictions on businesses.
why didn't they bounce in epic fashion?
it doesnt appear you're willing to look at what actually happened back then, or who was alive and well while it was happening. Pit is really credible.
“To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.”
I see why you and others think this way but consider this, what if tomorrow all of those cheap Chinese products just stopped flowing into the country?
Sure it would hurt China while they looked for new buyers, but the US consumer is addicted to Chinese products. We have no manufacturing alternatives to many goods. We don't make these things ourselves, so finding another country or countries to provide similar goods would only redouble our economic issues with those supplying countries. Do you think the Chinese don't know all of this?
PLUS they hold our debt and could just call it in. Sell off those treasuries en masse! That would be a terrible blow to the entire world.
It would be a blow to the world, and why they won't. We prop them up as well. Who is buying all of their stuff?
We still have the ability to build things. We have shuttered up factories all across this land that can be pulled out of mothballs and updated..
Whst is wrong with building America first? Nothing is the answer, and I know you know that.
My dad was a welder, a blue collar guy. He went in to business with a Army buddy who was a engineer. He ran the engineering side, dad ran the shop side. Both were good at what they did and ended up selling out for 33 mil in 1973. They made a bucket of money and provided good jobs for over 250 people in their mechanical contracting business. Lots of engineers, welders, pipe fitters, drafters, tool and die guys, general shop workers, office help up and down the scale. You know...from CFO down to a file clerk.
That is the American dream. That is what makes this country great.
Sure, I can buy cheap shoes made in China, but I pay $178 for New Balance shoes made here. Darn good shoes.
So here is the deal. If you want American jobs, you have to pay for American wages. It's that simple. Don't complain while you run down to Wal_Mart and buy the stuff made in China or Vietnam.
President Trump gets this. I agree the guy is a dork, but he gets it.....sooner or later you will appreciate what he is trying to do.
It's about time in my book.
If everybody had like minds, we would never learn.
The fact the left and their policies putting restriction after restriction on business and corporations had nothing to do with it.....ok pal.
Do you think you could actually move past the cliche's and give me some examples of exactly what restrictions were placed on clothing manufacturers that forced their hand to move their production to china?
As I said earlier, we can either have a productive discussion here or just throw crap. Right now all I'm seeing is crap.
Intoducing for The Cleveland Browns, Quarterback Deshawn "The Predator" Watson. He will also be the one to choose your next head coach.
We still have the ability to build things. We have shuttered up factories all across this land that can be pulled out of mothballs and updated..
Whst is wrong with building America first? Nothing is the answer, and I know you know that.
There is nothing wrong with that. All you have to do is convince corporations to move their production back to America.
Quote:
Sure, I can buy cheap shoes made in China, but I pay $178 for New Balance shoes made here. Darn good shoes.
I learned something new today. Thanks Peen! My next pair of sneakers will be New Balance!
Quote:
So here is the deal. If you want American jobs, you have to pay for American wages. It's that simple. Don't complain while you run down to Wal_Mart and buy the stuff made in China or Vietnam.
I've always been willing to do this.
Quote:
President Trump gets this. I agree the guy is a dork, but he gets it.....sooner or later you will appreciate what he is trying to do.
It's about time in my book.
Here's where we have a disconnect. That seems to be the message he sends on one hand, but not on the other. And being a dork isn't quite how I would describe him, but I digress. lol
Let's look at what he actually says. Now when it comes to steel, yes that would seem to apply. Yet let's look at his bigger message.
He says the tariffs are temporary. That this will end quickly. That we'll win this quickly.
Now if you're a business person, gearing up any manufacturing plant, hiring all the people both in management and production workers is a very expensive undertaking. Why would you make such a huge investment in something the leader of our country says won't last long? That he says will be over quickly?
In order to make such an investment, you would have to see a long term payoff to get a good return on such an investment. If Trump keeps telling everyone this will be solved soon, I don't see the incentive for businesses to make those investments. Especially in things like clothing.
I mean even Trumps clothes are made overseas.
Intoducing for The Cleveland Browns, Quarterback Deshawn "The Predator" Watson. He will also be the one to choose your next head coach.
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