Rost Ceo Sells 25% Of Stake

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einai

This is really a very short article, and I should say at the outset that I'm short the stock.

Now, having admitted that, let me tell you why. This afternoon around 14:30, Michael Balmuth, the CEO of Ross Stores, sold approximately 100,000 shares - or roughly one fifth - of his holdings. The filings can be seen on the SEC site:

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001238922

His holdings over the past 7-8 months can be viewed here:

http://stocks.us.reuters.com/stocks/insiderDetails.asp?name=BALMUTH MICHAEL H


I haven't had time to do all the math on this, but the situation seems to be this:

1) The sale is not the result of option exercise. More accurately, the shares sold were acquired through option exercise in March.

2) The sale is part of a 10b5 Plan, but no date is given for the plan in the filings. Make of that what you will.

3) He was long 300,000 shares until 03/22, when he exercised roughly 250,000 options (or 2500 if you like) resulting in a total position of 550K. On Oct. 15, he sold a quarter of that.

A sale this large has to have a reason behind it in my opinion. It would be nice if someone could figure out the event that triggered this, but I haven't had any success.

At some point it would be interesting to look into the exact nature of these plans. Basically the SEC will allow anything that can be interpreted as a Turing machine (a computer). That's to say basically anything is allowed. So I don't attach to much weight to the "hands off" part of the sale.

So these are my reasons for shorting. I think they're good - but you have to make the call.
 
Short huh?

Why?


Yes, I read your verbage. But again, why?

Chart doesn't suggest it.

Fundamentals, for those that subscribe to such include quite reasonable PSR of .65x coupled with an ROE of 28%.

Eh..................if an insider sold a stake acquired via a CASH outlay rather than being "rewarded" for performance, you might be on to something. You don't think he knows he's in the limelight? Aren't you disregarding the notion of coining more paper?

He has a money machine. Do you blame him? I have to scratch and claw for mine. Right Longhorns?

There is a flirting with institutional saturation. I wouldn't read too much into that either.
 

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I take it you meant "verbiage".

Well, you know, I don't place much stock in charts, so we have to part company on this.

As to the sale: He hasn't reduced his position in this company for over a year as I can see. Now he has done so dramatically.

I take that to be a significant event, particularly in light of the recent, and weak, same store sales numbers.

David H.
 
Quote from einai:

I take it you meant "verbiage".

Well, you know, I don't place much stock in charts, so we have to part company on this.

As to the sale: He hasn't reduced his position in this company for over a year as I can see. Now he has done so dramatically.

I take that to be a significant event, particularly in light of the recent, and weak, same store sales numbers.

David H.
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I don't have a postion here. Won't. Oops, I mis-spelled that too.

Eh.................I place a LOT of emphasis on charts. In fact, PRICE is the ONLY thing I transact in. A chart may not have predicitve qualities but it is indeed an elapsed history of transaction activity. It should go without saying a transaction entails BOTH a buyer and a seller. Should, but it has to keep being reiterated.

But, there is a distinction. A conventional seller is willing to incur a taxable event to eliminate exposure (taking profit, breaking even, stemming a loss). A buyer, FRESH risk and expectation of higher prices.. As for the short seller................unless timed right, feeds the machine. Are you tasty?

I won't delve into the merchandising of paper. Too much typing and you haven't got the elements down. "Down", get it?

I..........eh................don't place "much stock" in forcing one-baggers. Pssst, nominal of course.

Same store sales? Might make a good alibi for the ax now and then. That's about it. Forgot about him, didn't cha? You don't even know WHO your enemies are.

Significance, like beauty, is IN the eyes of the beholder. Wink.

You keep "us" posted on your progress. Afterall, YOU initiated the thread.
 
You know, before I became an academic, I worked on Wall Street. And both there and where I work now, people spoke in complete sentences. You know, with verbs and everything.

You seem to have a problem with that. And that makes what you say incomprehensible. Eh?

DH
 
Quote from einai:

A sale this large has to have a reason behind it in my opinion. It would be nice if someone could figure out the event that triggered this, but I haven't had any success.
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You've described yourself as an academic. I was also an academic, in another life. I noticed your comments about charts. Are you a Malkiel fan, by any chance? :)

Just kidding, but seriously, I don't really see this sale as being that terribly significant. There are any number of personal reasons for selling this much stock, relating either to his own finances or to some life circumstance.

Re: your short, I prefer to act when money is just lying there in the street, waiting to be picked up. Therefore, a breach of 22.75 and retest would be a nice short entry....

Oops! Sorry, I forgot about your disdain for the charts.

ROST is on my radar now, so thanks for that.
 
At last, a respondent who can speak.

I cut my teet at Bear, Stearns in the 80s in a quant group, so yes, if you do option modelling you work under Malkiel-like assumptions.

I don't disdain charts, indeed I think they're quite useful in the near term. But I think the notion of resistance levels that persist over months is bullshit.

So yes, I'll look at charts, but it's the last thing on my list, which runs from insider events (always on the lookout for that) through fundamentals through technicals last.

Anyhow, we'll have to see whether this sale means anything. I guess I'll have to leave the ten-baggers to billy-goat-gruff, or whatever his name is.

Cheers!

David H.

PS I've been buying SHA - also mentioned on this board a few days ago - for a couple of weeks now. I've got a much larger position in that than in ROST.
 
Quote from einai:

So yes, I'll look at charts, but it's the last thing on my list, which runs from insider events (always on the lookout for that) through fundamentals through technicals last.

PS I've been buying SHA - also mentioned on this board a few days ago - for a couple of weeks now. I've got a much larger position in that than in ROST.
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To be honest, I've always envied the high-end quants around here (guys like Aaron Schindler, for example). I wish I could speak your language. When I first started out I thought that TA was the Holy Grail. Luckily I was able to figure out the truth before blowing up. Short term S/R provides confirmation for a lot of my trades; with regard to its longer term relevance... I guess I see it as being just a notch or two above pure bullshit. I suppose we'd have to define what long-term means.

At any rate, I too would rather discuss these things with those who can formulate a complete sentence, even if we're on opposite sides of an argument. I'll take a look at SHA.
 
Quote from einai:

At last, a respondent who can speak.

I cut my teet at Bear, Stearns in the 80s in a quant group, so yes, if you do option modelling you work under Malkiel-like assumptions.

I don't disdain charts, indeed I think they're quite useful in the near term. But I think the notion of resistance levels that persist over months is bullshit.

So yes, I'll look at charts, but it's the last thing on my list, which runs from insider events (always on the lookout for that) through fundamentals through technicals last.

Anyhow, we'll have to see whether this sale means anything. I guess I'll have to leave the ten-baggers to billy-goat-gruff, or whatever his name is.

Cheers!

David H.

PS I've been buying SHA - also mentioned on this board a few days ago - for a couple of weeks now. I've got a much larger position in that than in ROST.
More...


Kinda of condescending LITTLE fuck, aren't cha?

Cut your "teet" at Bear Stearns?

OR.........did you mean sucking on hind tit? The trick is tugging without straining your neck. Kind of a quick jerking motion.

Do you have an identity crisis? Quant? Cute. Name dropping? BS. Transferring credibility to yourself?

An academic? Are we talking a random walk or an efficient market hypothesis? Hmmm, maybe Gordon's dividend discount model? Those that can DO, those can't teach Maybe you could publish a white paper on the correlation between same store sales to price churn. Massage some numbers quant boy to fit your "facts" to your theories.

Problem is, you transact IN price.

You often FORCE trades where they don't exist? There's nothing here either way in terms of a trade for more than a few points. Comment on every little squiggle. In turn I'll counter 'em. Sport.

What you do with your money is your business. That is until you come to a public forum, then you're fair game. Sport.

Tunnel vision? I consider fundamentals as explaining prior moves. Ditto for news. Yet, I'm cognizant of a 28% ROE and a PSR of .65. Why? Because clowns like you subscribe to such. In your case, it's SOS. As IF somehow there's a cause and effect to it. Only as the ax capitalizes on it.

Those insider shares sold, that you focus upon, went somewhere. Where? What proportion of outstanding was that? Shall I yawn now?

For sombody's who's been on Wall Street, you apparently were gone the day they discussed merchandising of paper. An endeavor focused upon 24/7. Perpetually.
 
WHAT???? No ReBUTTal from mister academia?

Let's sea, oops, I mean see, ROST has roughly 137 million shares outstanding. Those that are anal retentive may struggle with the word roughly, but that's the way the world works.

Now, quant boy, what proportion is "your" 100,000 shares of the float? It's OK, go out three decimals and fluff it up.

More importantly, at the present time volume averages roughly 2 million per day. Given a conventional 6 1/2 hour session, the run rate is roughly 308,000 shares per hour. Hence, your 100,000 equates to about 20 minutes of activity.

More importantly, IF the CEO's shares were simultanteous, aka a block, high probability they went to the ax. Since the ax buys wholesale and sells retail, no different than eggs or fish, safe to assume distributing higher. But since the quantity is scant, they're in the mix. Shares ARE shares. No identity. Paper financial instrument, carried on the balance sheet at par. .

That nice neat trendline on the chart isn't where "demand" dried up. It's where the ax put on the brakes in accordance with his inventory agenda. They're "worth" what he's willing to bid for them.

There's nuthin' here. Long or short

And ( oops I started a sentence with a prepostion) there's a distinction between 25% and one fifth irrespective of the modest QUANT titty.

Pssst, don't quit your day job in no-name academia. You'd starve. As for impressionable traderNik, 2800 posts speaks for itself. NOT one about taxes, right?
 
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