The Case for Long-Term Value Investing by Jim Cullen

Author:Jim Cullen
Language: eng
Format: epub
Publisher: Harriman House
Published: 2022-03-07T17:19:08+00:00

Source: Bloomberg.

Canadian Pacific

The results for Canadian Pacific were similar. The company’s business was different—more western-oriented and commodities focused—but CP shared the catalyst of a new focus on profitability. The outcomes were pretty much the same.

Canadian Pacific (2001–2021)

Source: Bloomberg.

16. Insider Buying

Insider buying by a company’s management is an obvious indication they are enthusiastic about their company’s prospects. The assumption is that management believes their company is about to experience growth in sales and earnings.

The job of the investor is to check whether the insider buyers’ enthusiasm is justified.

Following are a few examples where insider buying information was an important reason for purchasing the stock.

Citibank—John Reed

Back in 1991, the major New York banks were going through a meltdown because they got caught overweighted in a difficult real estate market. The following chart shows Citibank under pressure and dropping to a record low, at which point co-chairman John Reed stepped up and made a substantial open market purchase of the stock. The chart plainly shows what happened next, as Citi’s stock went through a period of strong appreciation.

Citi (1990–1993)

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.