Hulbert: Insiders Are Very Bullish

Insiders are becoming increasingly bullish….Now, I don’t usually buy into the insider buying/selling data (I’ve done quite a bit of research here leading to pretty inconclusive results), but I really like Mark Hulbert’s work and generally enjoy the insights he provides.  According to his data, insiders are the most bullish they’ve been in quite some time:

“The stock market is likely to be higher at year’s end.

That, at least, is the conclusion I draw from the recent behavior of corporate insiders, who are behaving in ways that suggest the correction’s bottom is at hand.

Consider the latest insider data, courtesy of the Vickers Weekly Insider Report, published by Argus Research. The indicator that they calculate on which I place particular attention is a ratio of all shares that insiders have recently sold in the open market to the number that they have purchased.

For the week that ended last Friday, this sell-to-buy ratio stood at 1.58 to 1, which is less than half the average level over the last decade of 3.4 to 1.

At the bull-market high earlier this fall, in contrast, the insiders’ sell-to-buy ratio got as high as 6.86 to 1.

In other words, at least when measured according to this indicator, the insiders are more than four times more optimistic about their companies’ shares now than two months ago. This much insider enthusiasm is a good sign.”

Source: MarketWatch

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Ricco

    best time to short the hell out of the markeys

  • http://www.dowtheoryinvestment.com Manuel Blay

    Insider buying signals tend to have more forecasting power when corporate insiders buy in a rising market. When they buy in a falling market (as it has been since Sept 14) the information content of insider buying is greatly diminished.

    The master piece on this subject is “Investment Intelligence from Insider Trading” written by H. Nejat Seyhun (Chair and Professor of Finance at the University of Michigan Business School)which you can find here:

    http://www.amazon.com/Investment-Intelligence-Insider-Trading-Seyhun/dp/0262692341/ref=sr_1_4?s=books&ie=UTF8&qid=1354020363&sr=1-4&keywords=insider+trading

    Regards.

  • Mercator

    Be fearful when others are ?? Forgot how that saying goes.
    Or, don’t just do something, stand there!