Insider trading: A correction indicator
CNBC this morning had a story about the fact that there has been quite a run up in the number of companies on the NYSE where corporate insider selling (i.e. anyone who has access to material information about the company and who can influence the direction of the firm) has spiked.
They say, “Insiders have been pulling out of stocks just as small investors are getting in.” Sucker Alert? Insider Selling Surges After Dow 14,000
Marketwatch says they are selling “at an alarming pace”.
While this is obviously something to watch carefully in the short term, given CNBC says “The last time executives sold their company’s stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10 percent to its low for the year”, this is something that should be something to monitor for stock ideas and to get an idea of market movements.
To track Insider Selling in the US, FINVIZ has a page that shows latest Insider Trading that you can filter by Buy and Sell . And, in Canada, canadianinsider.com, tracks the details of all their buys and sells of company securities of corporate insiders of publicly listed companies. This is on my Research Ideas page.