An Insider Trades the 'Housing Rebound'

Money talks, and earnings call transcripts walk. At least that is the case for homebuilder Toll Brothers (TOL), whose chairman Bob decided to provide some optimism during his Q1 2009 earnings call and then proceeded to dump stock not once, not twice, but seven times in a span of one month.

We have to take advantage of opportunities we believe will arise from the current downturn. We’re beginning to see some properties come to market at reasonable prices. We have not bought any yet, but we are getting closer. Ironically now is a very good time to buy a home with the decline in home prices and historically low mortgage rates, home price affordability is at an all time high according to the National Association of Realtors.

Ironically, it is an even better opportunity it seems to buy other property with proceeds from selling your own stock in the most insane short covering rally ever, eh Bob? One has to hand it to him though, he can sure see the forest for the green shoots.

Just in case it is not obvious, the red arrows indicate where Bob decided to call it a day...over and over...

Comments

[Stock Marke...:]

That is breathtaking, if not criminal...

The stuff you come up with and find is unreal.

Keep up the good work!

Jun 04 11:34 AM

[Market Sniper:]

Do not listen to what corporate insiders say, watch what they do. Part and parcel of near record corporate insider selling into this bear market rally. Don't be too hard on the guy. Maybe he sold to pay the college tuition bills for his kids. NOT.

Jun 04 11:38 AM

[J. Crighton:]

Wow.

That's priceless.

Jun 04 11:46 AM

[doubleguns:]

Looking at the chart looks like he was planting red shoots.

Jun 04 12:33 PM

[Roger Knights:]

maybe he needed the cash to go out and start flipping houses.

Jun 04 05:25 PM

[victoralpha:]

A picture is worth a thousand words. Puts perspective on all the great Home numbers that everyone is so gaga over. Well CNBC and the likes.

Jun 05 12:34 AM

[predictorma...:]

According the NAR it is always a good time to buy or sell a home.
There is some hysterically funny reading out there comparing what the NAR economists have said over the last few years and what happened. They have called a bottom eight or ten times.

Everything about housing is wrong headed these days. We need a good flush (up to the point of bulldozing worthless houses), not an uptick in the building of new homes.

Jun 05 10:05 AM

[H. T. Love:]

On Jun 04 11:34 AM Stock Market Sage wrote:

> That is breathtaking, if not criminal...
>
> The stuff you come up with and find is unreal.
>
> Keep up the good work!

No, it's criminal, if not breathtaking! :-) I wish I could trade that well! That *would* be breathtaking! ;-)

HardToLove

Jun 05 10:44 AM

[ain't no fo...:]

I used EDGAR several years ago to run the Form 4's for the Toll BROTHERS (all of 'em) and the Hovnanian BROTHERS (yeah, all of them) for the period mid 2005 to late 2006.

I urge anybody to tell me why you were buying housing stocks in those years when the Toll's and Hovnanians had collectively sold many hundreds of MILLIONS of dollars worth of insider stock (nearly all on option exercises and same day flips), at a time when they were nevertheless extolling the virtues of a housing market that was forever heading to the sky.

Those guys should have been prosecuted for their pump and dump scam... and now they're starting it again.

Jun 05 10:25 PM

[Tom Armistead:]

wpdragon, you have it right - Bob Toll is a master of timing when it comes to selling his stock, and he has done it for years.

There is a difference between buying a new home and buying homebuilder stock. In either case, the buyer needs to consider the alternatives. If a new home meets your needs better than an existing home then logically you should buy it.

On a stock, if other stocks offer better rewards, then the investor should consider making a change. I don't think Bob Toll is into pump and dump, I think he is a savvy investor. There are numerous other stocks that are more attractive than homebuilders in today's market.

Jun 06 11:55 AM

[Peter Cooper:]

Yes it is still far too early to see a property recovery - and with bond prices heading south, mortgages are heading north, see:
arabianmoney.net/2009/.../

Jun 07 02:02 AM

[Ricard:]

Fact is, this information is public. IMHO, the breathtaking aspect is how people buying the stock can ignore this kind of information, and like Tom Armistead pointed, it's been recurring in nature. I can't call that criminal, but certainly calling it neglect would be a vast understatement.

So many people blame others for mistakes that they themselves must own up to - this makes me sick more than anything.


On Jun 04 11:34 AM Stock Market Sage wrote:

> That is breathtaking, if not criminal...
>
> The stuff you come up with and find is unreal.
>
> Keep up the good work!

Jun 07 02:09 AM

[Windsun33:]

It looks like the TOL insiders have sold 6.6 million shares in the past two years and bought ZERO.

HOV on the other hand has somewhat more buys than sells from insiders, though the volume is only about 1/5th that of TOL.

Jun 07 06:28 PM