INSIDER SELLING SOARS, BUYING STILL AT RECORD LOWS
Despite a near 50% rally in the stock market and “better than expected” earnings across the board, we’re continuing to see unprecedented levels of insider selling and record low levels of insider buying. The buyers in recent weeks have accumulated just over $26MM in stock ($16.5MM of which was one buyer). Meanwhile, the sells amount to over $300MM. That’s a staggering 1:30 ratio if you back out the one larger buy.
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The following chart from insidercow shows just how anemic the insider buying has been in recent months. You’ll notice that insiders haven’t been substantial buyers since late last year and in early March of 2009 – both periods just prior to major market rallies.
Although the level of insider selling is certainly alarming it’s important to note that the very low levels of buying are particularly alarming. Insiders sell stock for many reasons, but they generally only buy stock for one reason: they believe the stock is going up. Despite the fact the media is reporting an end to the recession, a bottom in housing and a trough in earnings we are seeing a vote of zero confidence from the people who know these companies better than anyone else. Could this be a sign that the underlying economy is still in fact very weak as we continue to see in the trucking data, weekly rails data and weekly same store sales?
For a retail investor, is there a way to find out which company had the most insider selling as a % of floatin the last 4 weeks? Some free website somewhere?
Is it possible that corporate insiders are even more levered than their average Joe counterparts? These are the guys that are saavy enough to “know” how leverage works, correct? Perhaps they are needing to deleverage a bit.
would be nice if the last chart included prior years.
All those insiders will sure be sorry when the S&P 500 hits 1,200 next week.
What I find electrically-heated, leather-seated, convertible BMW-esque is how CNBC keeps hiking the thong-panties and bringing on the EGGSPURTS who get paid to tell us what the advertisers(like Scottrade and Chuck Schwab) want us to hear. Reagan was justified for tripling the debt because he was fighting the EVIL EMPIRE, Clinton was a commie for smoking pot, Leeroy Bush II was justificated for spending money ’cause there’s a “raghead” with an RPG around every corner, now Barry helps out the people who got him elected, and he’s up to no good. I didn’t vote for him, I didn’t vote for that husband of a wealthy beer distributorship-heiress either, but I sure love how people kick John Maynard Keynes’s teeth in and then use Keynesian economics and then boast about free-market capitalism.
If you follow Elliott Wagve Theory, we’re set up for a massive Wave III downward. I’m not talking some silly 10% correction, either. People need to separate GDP from wealth creation. Right now the debate is on re legalizing pot. I can double America’s GDP by the end of the year. Let’s lock up everyone who dog-eared a library book or forgot to wear deodorant. We would take care of the unemployment rate, we would seize their property and then the newly hired prison guards would have houses to buy. Would we have created any wealth? Nope. When Leeroy Bush II was in office, we gave tax cuts to anyone who bought a gas guzzler, then we lowered interest rates. Eventually, every small business owner bought a gas guzzler, demand for gas and cars went up. But wait, subsidizing people’s consumption of gas guzzlers isn’t real increase in demand, it’s phony. So, we printed more money, and now we had to buy our oil at high prices(commodities are the real money, not dollars) and then we blamed terrorists in the middle East for rigging the oil market.
So here we are now. If the government prints money and hands it out ot you for buying a house or a car, did the government really solve a problem? No, they transferred it. Namely, they transferred it from the balance sheets of the bankers and car dealers/manufacturers to you. Now, don’t you feel great? Question, if yuo needed $9,000 in subdsidies to go buy a Camry, who will buy cars next quarter? Your Camry will last 200,000 miles. Next quarter, we’ll need even more subsidies. And, if this is the solution, why didn’t they offer it in January when GM and Chrysler were still solvent? Because both Reps and Dems wanted them t go broke. In textbooks and in the libraries, you’ll find many examples of this: it’s called fascism. Everyone thinks that socialism is okay, so long as thry’re on the receiving end of it. But, those poor folks on the other side of town need to stop living on food stamps, ’cause they’re destroying America.
This country’s Money Supply just douboled. Of course the stock market is going up on that. But at what cost? There will be a correction, a big one. We won’t have a secular bull market until we get back to wealth creation. Sorry for being long-winded. Those insiders are cronies and crooks through and through. They got there by looking the other way.