Hulbert: Corporate insiders are dumping stocks at 25-year highs

|By:, SA News Editor

It's a sell sign: Corporate insiders are more bearish than at any time since at least 1990.

Such bearishness isn’t evident from the traditional sell-to-buy ratio, which stands at above average levels but no higher today than a year ago; Mark Hulbert highlights an alternative sell-buy calculation that strips out those who own more than 5% of a company’s shares - typically institutional investors, whose past transactions typically have shown no correlation with subsequent market moves.

Based on this adjusted ratio, corporate officers and directors in recent weeks have sold an average of six shares of their company’s stock for every one they bought - more than double the average since 1990.

Selling has been particularly aggressive in the capital goods, tech, consumer durables (autos, construction, appliances) and consumer non-durables (food and beverages, clothing, tobacco) sectors; pessimism isn't so rampant in energy, industrials and financials.