INSIDER SELL-OFFS
INSIDER SELL-OFFS
The Dow broke 10,000 on Oct. 14, but insiders have been signaling a stock market pullback. Since Sept. 1 directors and executives at publicly traded U.S. companies have sold $40 worth of shares for every $1 of purchases. That compares with $22 in sales for every $1 buy from March through August. Insider selling hasn't been this high since the downturn began at the end of 2007, according to TrimTabs Investment Research. "We've never seen a market bottom when there weren't significant levels of insider buys, and we've never seen a top without significant selling," says TrimTabs CEO Charles Biderman.
Activity by S&P 500 executives was particularly pessimistic in the third quarter, notes InsiderScore, as insiders sold almost $63 in stock for every $1 purchased. CEOs of all public companies unloaded $1.7 billion in company stock vs. about $95 million acquired, including Cisco Systems CEO John Chambers' $9 million sale in August. InsiderScore data also show that sentiment is especially negative at industrial goods, service, and technology companies.
Copyright 2009 BusinessWeek
