Insiders are Heading for the Exits?

Posted by Ian Cooper - Wednesday, November 24th, 2010

From Wealth Daily:

ver the last six months, corporate insiders sold over 120 million shares, while they bought just 38,000 (per CNBC).

That's 3,177 times more sells than buys.

Insider sales hit a fresh high just last week, when 8,279x as much stock was sold as bought.

The chart below tells the story from a long-term perspective.

The top section shows the price of the S&P 500 index.

The middle graph shows a "score" representing the ratio of insiders buying to selling; a high score indicates insider buying, and a low score means insiders are selling.

The bottom graph shows net volume ($ value of transactions, buys minus sales)...

insider buy to sell ratio

Data by, via SentimenTrader.

Insider selling is useful as a market indicator because it gives us a gauge on sentiment among top business execs.

When they're bullish on the economy and their company's prospects, they buy. And vice versa.

With that in mind, a few things stand out here...

Read more here.


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