During quieter days on Wall Street, when a CEO sold shares, it was big news.
But since the stock market gyrates by triple digits nearly every day now, the actions of CEOs and other “insiders” - officers and board members - often go unnoticed.
We should pay attention when a CEO buys or sells stock because there are lots of reasons why he or she might do so. At the most basic level, those who watch insider activity interpret buying as a good sign that the stock price could rise in the future. Selling sends the opposite message.
Over the last 30 days, the CEOs of 12 area companies have changed their holdings. Given that the stock prices of nearly every company have been beaten down quite severely, you’d be right to guess that most bosses are buyers.
That leaves two sellers. Campbell Soup Co.’s Douglas R. Conant sold 37,371 shares on Nov. 3 for $1.42 million, or $38.06 per share. Up until Thursday, the Camden food processor was one of the few stocks in the Standard & Poor’s 500 index that could boast (quietly) that it had appreciated. Its shares are down 0.9 percent for 2008.
But by number of shares, the biggest transaction by a local CEO in the last 30 days was announced Thursday when J&J Snack Foods Corp. disclosed that it bought 400,000 shares from CEO Gerald B. Shreiber.
The Pennsauken company paid $27.90 per share, making the total value of the transaction $11.16 million.
In the news release disclosing the sale, Shreiber said he sold for estate and tax planning purposes, which is perfectly understandable for someone in his mid-60s who’s been running the company he founded in 1971.
Shreiber remains J&J’s biggest shareholder, owning 3.9 million shares, or about 21 percent of a food processor with a market value of $480 million. He’s got a lot of skin in the game and he let investors know it:
“The sale is in no way a reflection of my thoughts about the company or its future, either over the short or long term,” Shreiber said in the press release.
The maker of soft pretzels and frozen beverages bought the shares as part of a plan announced in February to buy back 1 million shares. With the Shreiber deal, J&J has now bought 549,433 shares.
Chalk up another win for Delaware’s economic development efforts to build on its critical mass of operations in the financial-services industry.