INSIDER SELLING SOARS TO 2010 HIGH
Insider selling soared 17% for the week ending February 20th and hit a new 2010 high. Total buying also picked up, but remains near historically low levels. Total selling reached $956MM while buying totaled just $96.3MM. Insider buying has been unusually low throughout the rally as economic fundamentals remain questionable. Recent signs of recovery have done little to encourage insiders to invest their personal dollars in their own companies.
There were no notable purchases this week. On the sell side, large sales from CFO’s are also interesting. In this week’s report we saw large sales from the CFOs of Netflix and Walter’s Industries. Arguably, there is no one more familiar with corporate financial condition than the CFO so we always take notice of insider sales by CFO’s. All notable sales are attached:
Notable selling:
Source: Finviz
In rangebound markets like we’re likely to have for the next few years insiders would be lunatics if they didn’t sell the strong rallies (which is what we just saw, esp in sectors like materials).
What you didn’t examine is if the insiders know more than they are telling. Are they trying to beat the next market tanking? There’s been lots of talk about the “still too big to fail” banks and investment houses, and there is still no meaningful regulation of risk and leverage. It’s business as usual but, I’ll tell you this: should the financial industry require another bailout, you’ll be looking at a nation-wide revolution.
Viva la Revolucion
Insider selling has been particularly strong for most of last year. They are getting out as the market manipulators keep the indicies afloat and once most are out the market will drop heavily, wiping out the dumb fools who bought into this “rally”.