Corporate insiders get even more bearish, the Vickers sales-to-buys ratio rising to 5.61:1 from...


Corporate insiders get even more bearish, the Vickers sales-to-buys ratio rising to 5.61:1 from 3.8:1 at the start of September. The deterioration comes from Nasdaq issues, where the ratio jumped to 6.17:1 from 2.96:1. Perspective: The long-term average is 2-2.5:1. One year ago, with stocks gasping for air, insiders weren't sellers - the ratio dropped to 1.04:1.
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Comments (6)
  • Ray - Kitchener
    , contributor
    Comments (74) | Send Message
     
    And these people know what's coming. The poor joes in the market place holding mutual funds will suffer. It will be interesting to see how long the Helicopter and Super Mario can hold the market up. I find it interesting that the S&P is below the level since QE3 was announced. Just goes to show you what terrible shape this economy and the world is in. Where are all the buyers? The cheerleaders were claiming that we are recovering. Or - are they just doing the pump and dump dance.
    10 Oct 2012, 10:27 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
     
    Maybe Uncle Ben & Cousin Tim will start buying all these shares that insiders are dumping now. According to recent reports the central banks in countries such as Israel, South Korea, Switzerland, etc. have been doing exactly that. Is there no end to central bank interventions in markets these days?
    10 Oct 2012, 11:16 AM Reply Like
  • Tack
    , contributor
    Comments (16378) | Send Message
     
    Insider selling has almost no correlation to market moves, as has been demonstrated too many times to count, but these reports keep getting trotted out because some folks persist in believing them, notwithstanding the evidence.

     

    Insiders sell for myriad reasons: because they want to buy something, taxes, kids' educations, etc., etc. If somebody wishes to look for insider behavior to guide an investment decision, look at insider buying, because, unlike selling, buying is done for only one reason: the insiders expect prices to increase in the future.
    10 Oct 2012, 11:36 AM Reply Like
  • GaltMachine
    , contributor
    Comments (2080) | Send Message
     
    Tack,

     

    So true. It sounds plausible in theory but apparently reality fails to cooperate. I used to believe this as well until I actually studied it.

     

    However, what does have correlation is insider buying which tends to be associated with future stock gains particularly in smaller caps.
    10 Oct 2012, 01:02 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    Little late to report this. The insider selling began weeks ago. The large-cap biotech sector has been on a wild tear; if I were an insider, I'd take money off that table, and that is what we're seeing, in addition to other steeply appreciated sectors. Better question at this point is: when does the selling end?
    10 Oct 2012, 11:42 AM Reply Like
  • Choosh
    , contributor
    Comments (598) | Send Message
     
    Other reasons to sell...

     

    Reduce risk of increased capital gains tax next year.

     

    Some states are increasing income tax, and some will have tax for the first time.

     

    A big batch of awarded options will vest soon.

     

    A great time for your CEO to buy that 20,000 sq ft house as housing is coming back and interest rates are at their lowest.
    10 Oct 2012, 02:44 PM Reply Like
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