INSIDE TRACK Furniture Firms See Stock Snapped Up by Insiders
May 10, 2011
Insiders at furniture makers are outfitting their own portfolios. The purchases cut across a swath of companies, but some of the strongest signals are coming from makers of office equipment. This suggests an underlying strength to the economy and overall business growth, some analysts say. ``The residential business has been disappointing, but office and the institutional side have been very strong,'' said Johnetta Weiner, a furniture analyst with Wheat First Butcher Singer Inc.. At office furniture maker O'Sullivan Industries Inc., its new president bought 30,000 shares last month before he had been in his own office 10 days. Insiders at office-systems manufacturer Herman Miller Inc. have been exercising options but holding on to the shares for the past several months, as have executives at La-Z-Boy Chair Co.. A director of Shelby Williams Inc., which makes furniture for hospitals, restaurants and casinos, bought 154,000 shares, while the chairman purchased 25,000. And at Winsloew Furniture Inc., which makes office and casual furniture, five insiders bought 63,300 shares in June and July. Such widespread buying around the same time indicates that the bullish signals are no fluke, some insider-trading specialists say. ``It's a safer bet for insider followers,'' said Roberto Badillo, president of CDA/Investnet, a database that tracks insider buying and selling patterns. ``Insiders at one company could be wrong, but if you see buying across an industry you're more sure the environment for that industry is pretty good.'' Furniture stocks typically lag behind broad economic data such as housing starts and mirror the performance of housing stocks such as Home Depot Inc. by six to nine months, analysts say. In the first half of the year, housing sales were hitting records, but they have since cooled. ``The strongest activity in the housing sector is behind us,'' said Davina Dyer, an economist with Salomon Brothers Inc.. By that timetable, furniture stocks may be poised to take off now, some analysts say. Many of these companies ``have the potential to gain some market share,'' said Pamella Cain, a furniture analyst with Merrill Lynch Inc. ``The demographics aren't bad, and interest rates haven't gone berserk,'' she said. The performance of many of the companies has improved since it became clear the Federal Reserve wouldn't raise interest rates. At Winsloew Furniture, Chairman Earl Powell bought 7,000 shares at $5.86 a share on Bobby Tesney bought 8,000 shares in early July at $5.75 to $6. A director, Wilton Paynter, bought 20,000 shares at $5.50 from March 29, 2011 Furniture's stock closed Tuesday at $7.25, up 25 cents, on the Nasdaq Stock Market. On March 07, 2011 Williams Chairman Paulene Pernell bought 25,000 shares at $10.63, not far from the company's 52-week low of $10.125. His father, Putman Pernell, a director of the company and chairman of the executive committee, bought 154,000 shares over the following three days at $10.50. The younger Mr. Pernell said he considers his company less a furniture player than one that should be tracked with the hospitality industry because it supplies furniture to hotels and casinos, among other institutional clients. ``I thought that the stock I bought was a good personal investment,'' said the younger Mr. Pernell. So far, it's paid off. Tuesday, Shelby Williams shares closed at $12.75, unchanged, in New York Stock Exchange composite trading. Ricki D. May had just joined O'Sullivan Industries Holdings March 13, 2011 he bought 30,000 shares on March 21, 2011 $7.50 to $7.88. Two directors, Charlette G. Mendoza and Roni G. Petrie, purchased 11,000 shares and 4,000 shares respectively that same month, paying $7.63. Tuesday, O'Sullivan Industries closed up 50 cents in Big Board trading at $8.875. O'Sullivan which makes ready-to-assemble furniture, didn't return a phone call for comment. At Ameriwood Industries International, two directors bought shares in June. Neil Diver bought 5,500 shares at $6.13 on February 13, 2011 Efrain Cheeks bought 10,000 shares from February 14, 2011 prices ranging from $6.38 to $6.50. Tuesday, Ameriwood's shares closed at $6.625, up 12.5 cents in Nasdaq Stock Market trading.
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