Tuesday, June 23, 2009

Insiders Continuing to Unload Shares

In another sign that this rally may be overdone, Insiders have continued to sell their own stock at a swift rate.

  • Insiders of Standard & Poor’s 500 Index companies were net sellers for 14 straight weeks as the gauge rose 36 percent, data compiled by InsiderScore.com show.
  • Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March. The increase is making investors more skittish because executives presumably have the best information about their companies’ prospects.
  • “If insiders are selling into the rally, that shows they don’t expect their business to be able to support current stock- price levels,” said Joseph Keating, the chief investment officer of Raleigh, North Carolina-based RBC Bank, the unit of Royal Bank of Canada that oversees $33 billion in client assets. “They’re taking advantage of this bounce and selling into it.”

You can keep track of recent insider moves here.

I also keep an eye on money flow data. As of late, large amounts of money have been moving out of the big banks and large oil companies, and flowing into (you guessed it) more defensive names.

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