Uncertainty: Corporate Insider Buying Has “Disappeared. Almost Overnight.”
September 21st, 2011
What’s next for the stock market? In the grand scheme of things, it really doesn’t matter to those of us who have taken our assets off the table and have chosen instead to “get physical.” But there are still millions of Americans who are depending on stocks for their livelihoods and retirements. So, for those who are wondering what the sentiment is on Wall Street, consider Why the insiders have quit buying stocks:
Chief executives. Board members.
The head honchos. The people who know.
Just a few weeks ago, they were out in force, buying up shares in their own companies with both hands.
No longer. They’ve disappeared. Almost overnight.
“They’ve stopped buying,” says Charles Biderman, the chief executive of stock market research firm TrimTabs, which tracks the data. “Insiders aren’t buying this rally.”
Insider stock purchases, which surged above $100 million a day in the market slump last month, have now collapsed to just $13 million a day.
Meanwhile the ratio of insider sales to purchases has skyrocketed. Today insiders are dumping $7 in stock for each $1 that (other) insiders are buying. That’s a worrying ratio. Six weeks ago the amounts of purchases and sales were about equal.