Why it may not be a recovery after all?


The recent booming stock markets may have lulled most Americans into believing that things are getting better. Corporate hot-shots are not buying the double speak from Washington and are using the current run-up in stocks to dump their holdings. Or atleast that’s what Thomson’s insider research division newsletter says.

bq. Corporate executives sold $4.9 billion worth of their own companies’ stocks during February, nearly double the historic five-year monthly average for selling and more than 50% higher than January’s $3.1 billion volume. This represents the highest level of monthly insider selling since May 2001. Driven by the strong sales volume, the dollar sell-buy indicator – our favorite leading indicator of insider sentiment – reached its most bearish reading to date, $51.48, in February. The measurement represents the tenth consecutive month in which the sell-buy ratio has exceeded $20, which has historically signaled “very bearish” territory.

The technology insiders however are feeling much better about the future.

bq. Technology stood out in February as the sector with the most pronounced increase in executive buying. Tech insiders – including those at Corning (GLW), Black Box Corp. (BBOX), Pixar (PIXR), and Asyst Technologies (ASYT) – acquired $32 million worth of stock, their highest monthly buy volume since August 2002.

Comments are closed.