Tempur Pedic: So Lovely When Executives Pick Tops & Bottoms in Their Own Stock

Jun 18, 2012
J. Webster
Comments Off on Tempur Pedic: So Lovely When Executives Pick Tops & Bottoms in Their Own Stock

In just two months, Tempur-Pedic International, the maker of those soft and comfortable mattresses, has gone from $87 a share to $23 a share. That’s a lovely 73% drop.

But what’s interesting is the top in the stock was pretty clearly defined for Tempur Pedic International on March 8, 2012 when David Montgomery, Exec. VP and Pres of International Operations, sold roughly 33,000 shares at a price of $82.11 a share. And then about a week earlier, on February 29, 2012, Dale Williams, Chief Financial Officer and Exec VP, sold 65,000 shares at $80 a share. The big timers were selling.

But now the bottom is in for Tempur Pedic so David Montgomery is buying again. Well, it appears to be the bottom:

Andrews Mclane, director at Tempur Pedic International, bought around 112,000 shares worth $2,801,920 on June 8. Also, David Montgomery, executive vice president, exercised a stock option to purchase 90,000 shares on June 12, after selling 34,700 shares earlier that day. The stock option allowed him to purchase shares below market value, at an average cost of approximately $6.14.

Shares of Tempur-Pedic plunged more than 40% on June 6, when the company released a weak outlook for the rest of 2012. Tempur-Pedic was trading 1.7% lower for the day. (Benzinga)

How does the individual investor, the small timer, do battle with the big boys when they have all the information? Are you supposed to just follow these guys in and out of their stock and not listen to anything that comes out of their mouths on conference calls? Action speaks louder than words.

It’s not like these two executives did anything wrong. It’s just that it all seems too easy and too perfect for their own personal bank accounts. The small timer doesn’t get the option to buy the stock that’s trading for around $23 a share for $6.14.

See all these insider trades for TPX at Yahoo Finance.

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