Everyone is selling and yet insiders have stopped offloading their equities and have begun buying instead. Buying at the fastest pace since May 2008, no less.
According to Trimtabs, an investment research firm, “buying by corporate insiders has picked up dramatically as stock prices have swooned”. Here’s the chart:
And some more comment from Trimtabs:
Based on the latest filings of Form 4 with the Securities and Exchange Commission, insiders have bought $861 million so far in August. Insider buying this month is running at the fastest pace since May 2008, and insider buying this month is already higher than in any other month this year. TrimTabs regards the pickup in insider buying as a bullish sign. Since insiders know more about their companies’ prospects than anyone else, it is positive that insiders are putting some of their own cash to work in the market. But TrimTabs cautions that insiders are not infallible. Insiders were also buying heavily in late 2007 and early 2008, right before the financial crisis intensified.
Though, if you know there’s a crisis coming perhaps it makes sense to invest in your own employer, if your interests are mutually intertwined?
Trimtabs: “Insider buying is non-existent” – FT Alphaville