INSIDER SELLING SOARS 77% TO NEW HIGHS. BUYING STILL NON-EXISTENT.
Courtesy of The Pragmatic Capitalist
The negative trends in insider selling and buying continue to worsen as insiders continue to give the ultimate vote of no confidence in their own future share price performance. Insiders sold $834MM in stock in the last week ending 9/18/09. That was a 77% jump from the prior weeks reading of $471MM. More alarming is the non-existence of insider buying. For the latest week insiders purchased just $21.9MM in stock. As we’ve mentioned previously, insiders sell stock for a varying number of reasons, but generally only purchase stock for one reason – they believe the stock will rise in the future. As of now, it’s safe to say that insiders aren’t confident enough to put their personal fortunes behind their own firms – a trend we’re also seeing in terms of corporate buybacks. This has to make one wonder just how strong the recovery is in terms of corporate earnings. While the stimulus based recovery may appear strong on the surface, the long-term sustainability is certainly being questioned by those on the inside….
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