The insiders are selling heavily

[Pryderi]

[link:http://www.marketwatch.com/story/the-insiders-are-selling-heavily-2012-02-09?link=MW_story_popular|]

on the theory that corporate insiders — officers, directors and largest shareholders — know more about their firms’ prospects than do the rest of us, it can’t be good news that they are selling at such a heavy pace.

Consider a ratio calculated by Argus Research of the number of shares insiders have sold in the open market to the number that they have bought. Last week, according to the latest issue of Argus’ service, the Vickers Weekly Insider Report, this sell-to-buy ratio stood at 5.77-to-1. And among insiders at companies listed on the New York Stock Exchange, this ratio was even more lopsided at 8.2-to-1.

Making these recent readings even more worrisome, according to Argus Research, is that they came on markedly stepped-up activity among corporate insiders. This increases our confidence that the ratio accurately reflects prevailing sentiment among a broad cross-section of the insiders.

Economic October Surprise by the oligarchs?

http://www.marketwatch.com/story/the-insiders-are-selling-heavily-2012-02-09

[bobalew]

1. These sales are closely tied to the Large amount of Insider compensation in Grants of Stock,

And restrictive Sales timing windows, to comply with Sarbanes Oxley & other SEC rules & regs. So, when the STock Is up from When the Garnt was issues, The time to strike the Iron is then, and They do. Look at any NAsDaq Traded stock, look at the timing of reported income, and then, Look at the insider activity. If It's UP, or someone is stuck with a Positive Value Expiring Grant, you'll see them selling it...

[Brettongarcia]

4. But also? War with Iran drives oil prices up

Last edited Fri Feb 10, 2012, 02:25 AM - Edit history (1)

Sounds very good.

But also say: what about possible trouble in the Middle East? Possible war with Iran? And interruption of oil supply?

[DallasNE]

18. Granted -- Looks Like Business As Usual

A good part of executive pay is in options and they have expiration dates so in an up market they hold them until the last minute and cash them in. The sale shows but the exercise is listed as such rather than as a purchase so these numbers are always very negative. Here is an example from SanDisk. This is actually compensation but is taxed at the lower 15% capital gains rate.


11/02/11 BRUNER JUDY Sold 50,000 49.45 2.47 Mil
11/02/11 BRUNER JUDY Exercise 50,000 22.15 1.11 Mil

[KurtNYC]

22. The DOW is in the top end of its range

So generally a good time to sell.

to others: I don't think the US vs. Iran war will tank the market since the Iraq and Afghanistan wars did not. High oil prices could help U.S. manufacturers.

[DippyDem]

2. Link please?

[Ruby the Liberal]

3. Please update with a link, per DU copyright policy

http://www.democraticunderground.com/?com=copyright

[Pryderi]

6. done. the linke tabs don't work correctly here at du

http://www.marketwatch.com/story/the-insiders-are-selling-heavily-2012-02-09

[Ruby the Liberal]

11. Thanks!

You can just drop in the link, you don't need to use those buttons or any tags - it will convert them to clickable for you!

[Bossy Monkey]

5. Here's the link

http://www.marketwatch.com/story/the-insiders-are-selling-heavily-2012-02-09

[grantcart]

7. I am guessing that it is more profit taking. Pretty usual when you have as strong a run as we have

just seen.

stock market is reaching historic highs.

Take some of your stocks out now and wait for the Euro or something else to bring it down and go back in.

[stopbush]

15. Bingo!

[WCGreen]

8. A lot of these sellers are also worried about new tax ramifications that might kick in

if the tax cuts are not renewed...

[thelordofhell]

14. Winner

[mopinko]

17. yep. moved up the bonus this year so that they would be sure to get the

payroll tax cut in case it is not extended.

[BadgerKid]

9. People cash in for all sorts of reasons.

raising money to pay estimated taxes, a new Miata for the grandkids, etc. And sometimes it is prudent to take money off the table. Mass selling into strength suggests the latter.

Investors, I have read, look for when insiders purchase stock using their own cash as a sign of a future increase in stock value.

[Schema Thing]

10. After a very uncertain stretch, their stocks are finally back at a high point.

[joeglow3]

12. I was granted 400 RSU's last year

It has a 3 year vesting period. Two comments:

1. The company automatically sells 30% of your shares to pay taxes (as you are taxed on 100% of the value of the stocks).
2. Many people (my self included) will sell the other 70% as I don't want any investments in tied up in the company I work for.


That said, I am not one of the people they are looking at in this study.

[unkachuck]

13. "...sell-to-buy ratio stood at 5.77-to-1."

....does this mean the wall-street 1% rats are jumping off this sinking ship?

....better not attack Iran until after the election....$10 a gallon gas will certainly dampen Obamas' rat appeal....

[Knight Hawk]

16. A Bubble!

Like the housing bubble the stock market may well be a bubble.The fed is keeping it inflated until after the election.Banks are buying a lot of these stocks.Most smart money is flowing into bonds.When the bubble bursts pension funds and not so savvy individuals will be hurt.

[CAPHAVOC]

19. I think you got it.

[raouldukelives]

20. Maybe they are developing a conscience.

Tired of reaping profits off the backs of slave labor and rapid destruction of the planet. Suddenly realizing it will always get worse unless they themselves start to feel they have a personal responsibility to make the world better for those that come after them.
Nah, never happen.

[Roland99]

21. The last shoulder is nearly complete on the S&P500

the dropoff is not far away.