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