Insider Trades That Made Execs Millions
Should Jamie Dimon & Sheryl Sandberg quit their day jobs?
While they might be unlikely stock traders, both have placed well-timed bets that have ridden the rally and are in line to notch steep gains as the Dow hovers near five-year highs.
And they're not alone — far from it.
According to exclusive data from InsiderScore, which tracks market activity by company insiders, a number of executives on Wall Street and beyond have made remarkably adept plays in their own stock — stakes which are now reaching new highs as the Dow continues its rally past 14,000. (Read More: Investors Getting Cold Feet Around Dow 14,000: Survey)
Las Vegas Sands CEO and Chairman Sheldon Adelson has racked up monster gains on a $37 million purchase of company stock. In March 2009, soon after the market bottomed during the financial crisis, Adelson scooped up 12,500,000 shares around $3 apiece. (Read More: Inside America's Economic Crisis)
Since then, Las Vegas Sands shares have skyrocketed to $54, meaning Adelson's initial purchase is now worth north of $600 million.
Though Jamie Dimon's gains are hardly the 1,700 percent rally that Adelson saw, his 62 percent gains are nothing to sniff at. Dimon first bought $11.5 million in JP Morgan stock in early 2009, and added $17.1 million to the pile in July 2012 — when the shares fell on the bank's London Whale trading blunder. Shares are up 40 percent since the most recent purchase, meaning Dimon's bets have made $18 million overall, according to InsiderScore. (Read More: Fed Slaps JPMorgan on Wrist With London Whale Order)
While executives are restricted from selling around material announcements, they do have, to be sure, the best read on company performance, strategy and sentiment. The other group with access to this information: Company boards of directors.
It was on Starbucks' board of directors that Facebook COO Sheryl Sandberg nabbed $126,000 of the coffee company's shares. From her April 2010 open-market purchase — that slice is up 104 percent. Sandberg left the company's board in late 2011, and may have cashed out some of her position (the rules for disclosing insider transactions become less stringent when an executive leaves a company).
Bank directors are seeing their stocks rising, too. CVS Caremark CEO Thomas Ryan bought into Bank of America while sitting on the Charlotte-based lender's board during the financial crisis. Ryan got 50,000 shares of BAC at roughly $5.60 a piece in January and February 2009 — the stock has more than doubled since then. Citigroup director Roberto Hernandez has seen his $7.5 million stake in international lender rise by $18 million, or 240 percent, since he purchased it in March 2009.
Some lesser-known companies have directors whose stakes are in the 400 percent-plus club. Harley Davidson director George Conrades has seen his $500,000 share purchase rise 400 percent. Dana Anderson, vice chairman of the board at Macerich, bought on eight occasions throughout the depths of the crisis. Anderson's move was a prescient one for a director at a real estate developer; while she's sold off a portion of the stake, her 116,000 shares are up more than 400 percent.
So how much higher can they go? Possibly a lot.
Stock picker Lazslo Birinyi on CNBC said that the S&P 500 would reach 1,600 points at some point in 2013. JP Morgan chief equity strategist Tom Lee said last week that the S&P and Dow will reach levels of 2,800 and 18,000 — respectively — in the next four years. (Read More: Birinyi: S&P 500 to Reach 1,600 This Year)
Perhaps for execs who have seen their paper gains skyrocket, it's finally time to cash in.