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Dillard delight; retail executives go shopping for their company's options.

Dillard Delight Retail Executives Go Shopping For Their Company's Options

If a company's growth is predicted by upper management exercising its options, stock in Dillard department Stores may have a bright future.

From Jan. 31 to March 26, 23 Dillard executives exercised options totaling 71,000 shares, an average of just less than 3,100 shares each, according to INVEST/NET Inc., of N. Miami, Fla., a registered investment adviser.

They paid prices between $24.75 and $42 per share, with most of the prices paid in the $25 range. Dillard's stock has been hovering in the low 70s.

The most bullish executive was James B. Wilson, VP, who bought 9,000 shares. Next in line was T.R. Gastman, VP, who bought 6,000 shares, followed by Donald C. Bradley, VP, 4,000, and 10 executives who each bought 3,500 shares, INVEST/NET says.

Comment from Dillard's on the phenonmenon was not forthcoming, as usual. But one observer says, "They're very close-mouthed at Dillard's. If they go around talking about business, they feel they're talking about it more than running it."

Performance of D.H. Holmes Ltd. Stores, based at New Orleans before their merger with Dillard, is lagging, but the rest of the Dillard stores are doing well, an analyst says.

With more national retail groups coming up for sale, Dillard's will continue to be counted as a strong, major player looking for the right deal to add to its shopping empire.

With so many managers exercising options at the same time, there probably is some factor affecting all of them, possibly an accounting policy or an option time limitation window, says Ellis Sloan, a portfolio analyst at Meridian Management, Little Rock.

"Whenever management buys stock, that is interpreted as a real vote of confidence," he says.

"Sometimes, a company will intentionally do this to send a message to the market. In the case of Dillard, however, they don't need to do that. The performance of the company [stock] is such that they don't need the added publicity."

Among other insider transactions at Arkansas companies:

* In 1989, Hudson Foods Inc. purchased Land O'Lakes' Schweigert luncheon meats and turkey further-processing divisions for about 683,000 shares of Hudson stock, valued at about $10.6 million.

From Feb. 16 to March 30, Land O'Lakes sold 63,756 shares of class A common at $12.38 per share for a total of $789,000. Hudson stock is trading at $16.75 per share. The sale reduced Land O'Lakes' holdings by about 9 percent.

* J.B. Hunt, chairman of J.B. Hunt Transport, recently sold 62,007 shares at prices between $21.13 and $21.75 per share.

Hunt chipped only about 1 percent off his holdings of 10.7 million shares.

His recent transaction was just part of his personal financial planning, and as Hunt gets older, he will probably sell more stock as he arranges his estate, says James T. Schnoes, VP/treasurer, at the Lowell trucking firm.

With 68 percent of the company's stock held by its board and management, analysts welcomed the sale and say they would like to see more stock become available to the public.

* Sam Walton, chairman, and S. Robson Walton, his son and vice-chairman of Wal-Mart Stores Inc., each indirectly sold 40,920 shares at $46.81 per share on March 19. The stock has been selling at $50.25 per share.

The sales represented 28 percent of the elder Walton's stock and 33 percent of his son's.

The Waltons could not be reached for comment.
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Title Annotation:Insider Trading
Author:Kern, David F.
Publication:Arkansas Business
Date:May 7, 1990
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