Wachovia Insiders Are Placing Big Bets on Company

Wachovia (WB) Director, Lanty Smith, is at it again.

He followed up his 100,000 share purchase last week with another 37,000 share purchase on Wednesday (11/15). Since the end of August Smith has purchased almost $8 million dollars of Wachovia stock at prices between $38 and $48 a share. Smith now owns 220,000 shares of the bank.

The purchases make Smith the third largest individual shareholder at Wachovia.

Superinvestor Peter Lynch famously once said,

There are a multitude of reasons insiders sell shares that have nothing to do with the health or the future of the company. I can only think of one reason they would use their own money to buy shares, they think the share price is going up.

Wachovia insiders are placing big bets on the company and that is worth noting.

Comments

[SDBryan:]

Did Peter Lynch also have the statement about trying to catch a falling knife? Only joking... kinda.

It's always good to see insiders buying, especially when no one whatsoever seems to have any idea about how bad the damage really is. But until the downtrend line is broken I think I'm done playing with bank stocks for a while. I'll just sit back and (hopefully!) collect my 6%+ yields.

2007 Nov 21 06:36 PM

[jsp9999:]

I have not found many examples of good insider buying as well as selling. Anyone knows the statistics? For a few times I have followed insider buys and proved them as untimely.

2007 Nov 21 07:42 PM

[jcrash:]

Check out CHK. Aubrey has been buying for quite a while.

2007 Nov 23 09:35 PM

[Dan Jacome:]

19M worth of stock on Wednesday....something is up

2007 Nov 22 10:57 PM

[Oh Blah Dee...:]

RE: "I can only think of one reason they would use their own money to buy shares, they think the share price is going up."

Well, I can think of three more reasons insiders would buy shares of their company:

1. They want to increase or gain control of their company by buying more voting shares.

2. They want to influence outsider buyers by implying that the insiders has confidence in the direction of the company.

3. If they buy enough stock, the insiders may be "buying jobs" for themselves.

2007 Nov 23 09:40 AM

[Oh Blah Dee...:]

RE: "I can only think of one reason they would use their own money to buy shares, they think the share price is going up."

Well, I can think of three more reasons insiders would buy shares of their company:

1. They want to increase or gain control of their company by buying more voting shares.

2. They want to influence outsider buyers by implying that the insiders has confidence in the direction of the company.

3. If they buy enough stock, the insiders may be "buying jobs" for themselves.

2007 Nov 23 09:40 AM

[Hambone:]

I wonder what his strike price was.. As a former WB employee, the World savings purchase is a ticking time bomb. When Stan called Kenny Boy, it may have been a warning call. Stan truly did not know how bad his portfolio was and Kenny Boy is clueless about what a foreign national, negative am, no income qualifying loan is. He will soon find out though!

2007 Nov 23 01:39 PM