A (Bearish) Look at Increased Corporate Insider Trading

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New York- This week the news reported that “corporate insiders are selling their companies’ shares at an abnormally fast pace”.  Some independent research on this irregular activity can be precious.

Last week, The Vickers Weekly Insider Report, a publication by independent research provider Argus Research, indicated that corporate insider selling activity at NYSE and AMEX-listed companies reached the highest point since the data collection started in 1974.

Mark Hulbert, founder of Hulbert Financial Digest, wrote an article debunking some possible bullish interpretations of this increased insider trading phenomenon. One of his most compelling bearish arguments is that the stock market has not been rallying strongly therefore it is not safe to assume that the increased trading is nothing else than a normal sign of insiders trying to capture earnings.

Bearish or bullish interpretations aside, publicly available data (SEC form 4) shows that there is an unusual increase in corporate insider trading activity. Given the current market conditions it might be worth the look at some independent research on this.

Besides Argus Research and its Vickers Weekly Insider Report, there are a number of independent research companies that can add value through research and analysis of this phenomenon. Research firms such as 2iQ Research, Insider Insights, Form4Oracle LLC, and Muzea Insider Consulting Services are just a few examples of players that can add significant value through their data and analysis of insider trading.

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