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Most Recent Insider Selling to Buying Ratio: 82:1

Tyler Durden's picture




 

You would think that insiders would finally change their tune after almost a year of straight line gains in the market. Think again. The most recent insider trading data from finviz indicates that insider sellling outpaces buying by a ratio of 82! In the most recent data set, $11.6 million in stock was purchased by insiders, while a whopping $957 million was sold. And somehow pundits are still spinning this mass orchestrated sell into the bid by those in the know as a bull market.

 

Insider Trades 12.7 finviz -

 

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Mon, 12/07/2009 - 10:45 | 155173 Cursive
Cursive's picture

Well, someone likes this market.  What the heck is it doing above 1100?  It couldn't be DISTRIBUTION, could it?  I can't wait for the mother of all clawbacks.

Mon, 12/07/2009 - 11:37 | 155222 Divided States ...
Divided States of America's picture

Yeah, could be the foreigners snapping up houses in the USA like mad and now thinks stocks are cheap. I mean first the Foreigners took away our jobs, then they want to take away our homes, and now they want to take away our identity. What a great country this is. Thanks Obama for the change.

Mon, 12/07/2009 - 13:57 | 155445 Master Bates
Master Bates's picture

Actually, Bush crashed everything.  Everybody wants to blame Obama, but the market hit new lows 2 months before he was sworn in, and 2 months after.  That can hardly be blamed on him, no matter how much Fox tries.

Mon, 12/07/2009 - 14:13 | 155487 Divided States ...
Divided States of America's picture

Obama was the saviour. We were expecting drastic changes for the better, yet he has only made the situation worse. It is definitely his fault.

Mon, 12/07/2009 - 15:35 | 155625 Anonymous
Anonymous's picture

It is definitely the fault of many people. This is not Sim City with Obama at the keyboard. Are you even serious? Please tell me you're joking...

Mon, 12/07/2009 - 10:46 | 155176 Anonymous
Anonymous's picture

Given that shares are often bought at prices set below market value, or granted outright, it does not surprise me at all to see selling outpace buying. Sell all you want, we'll make more!

Can you chart ths figure historically and show if insider buying has EVER outpaced selling?

Mon, 12/07/2009 - 11:54 | 155246 Anonymous
Anonymous's picture

Well, in order to sell a stock they need first to buy them.
A grant will show up as a buy

Mon, 12/07/2009 - 12:44 | 155316 Anonymous
Anonymous's picture

If someone gets shares paid as bonus or part of the salary, those shares won't be bought by anyone but the company so of course, if you get free shares you will sell them at any price and better if high as you will make always money.

Mon, 12/07/2009 - 12:50 | 155331 Anonymous
Anonymous's picture

Option exercises don't look like they show up as buys on the finviz charts. http://finviz.com/insidertrading.ashx

If you go to all transactions, it lists options exercised. But if you go to buy, those transactions aren't included. So I don't think option exercises are included in the buys for the chart above.

Mon, 12/07/2009 - 11:11 | 155177 Cognitive Dissonance
Cognitive Dissonance's picture

Let's see. Insiders selling, mutual funds experiencing outflows from equity funds for months, hedge fund disbursements continue, pension, private equity and other smart money moving away from stocks to bonds or cash, 401(k) money shifting to bonds, along with lower contributions from participants and a major increase in 401(k) loans.

Who's left in the stock market? Oh, I know.

Just Mr. and Mrs. Taxpayer, backing up the Federal Reserve. I can see this will end well.

Mon, 12/07/2009 - 12:18 | 155271 Cursive
Cursive's picture

This is my thinking, as well.  Most participants are out of the market (look at the dramatic drop in volume) and the participants that are left, e.g. big banks and brokerages, all have a nod from the USG that they'll be backstopped.  Now, if anyone got the notion that the backstop were not there or that it would be removed, look out below.

Mon, 12/07/2009 - 15:13 | 155598 Anonymous
Anonymous's picture

yo what your saying is, because everyone is out of the market you don't want to be in? This logic would make it seem that july 2007 was the best buying opportunity of a life time... And as we know that was incorrect

Wed, 12/01/2010 - 01:37 | 767093 Karston1234
Karston1234's picture

But if you go to buy, those transactions aren't included. So I don't think option exercises are included in the buys for the chart above.accounting degree | engineering degree | business administration degree

Mon, 12/07/2009 - 11:01 | 155192 Anonymous
Anonymous's picture

Air guitar isn't real music. But if you're invested in real companies, with real franchises, visible earnings, and relatively transparent accounting, you should be OK for the 3 to 5 year holding period.

Mon, 12/07/2009 - 11:57 | 155250 bugs_
bugs_'s picture

The Munder Air Guitar Fund.

Mon, 12/07/2009 - 15:08 | 155590 Assetman
Assetman's picture

Righteous, dude!

Wed, 12/01/2010 - 01:37 | 767095 Karston1234
Karston1234's picture

Thanks for a nice share you have given to us with such an large collection of information.
business management degree | computer science degree

Mon, 12/07/2009 - 11:02 | 155194 AnonymousMonetarist
AnonymousMonetarist's picture

Watch the rats

Mon, 12/07/2009 - 11:06 | 155199 Anonymous
Anonymous's picture

This is the rich getting a bailout by the Big banks holding up the market, When the market does drop only the not wealthy will be broke.

We bail out the banks...
the banks bail out thir friends....
Taxpayers get the bend-over-and-take-it.

Mon, 12/07/2009 - 11:10 | 155202 Anonymous
Anonymous's picture

I'm having problems downloading the file so I cannot read it.

Do you guys only focus on statistics for penny stocks or other?

Mon, 12/07/2009 - 11:16 | 155206 Fish Gone Bad
Fish Gone Bad's picture

I could not figure out how Bank of America was trading at $229.20.  The symbol (BLK) is for Blackrock.  I stopped looking after the very first item was incorrect.

Mon, 12/07/2009 - 11:28 | 155216 Anonymous
Anonymous's picture

BAC owns a portion of BLK.

Mon, 12/07/2009 - 12:47 | 155322 Cognitive Dissonance
Cognitive Dissonance's picture

I believe you may be looking at this list incorrectly. This is a list of individuals (or entities that are considered individuals for insider trading purposes) that are buying or selling. 

Bank of America, which it appears has a seat on the Blackrock board as a director (represented by a human being but still technically B of A) and which because BofA has a 5% or more ownership relationship with Blackrock and is thus a insider, was buying. Thus it is listed that way. 

Mon, 12/07/2009 - 15:41 | 155635 Anonymous
Anonymous's picture

Hey read Cognitive Dissonance's reply to you. I hope you learn from this...

Mon, 12/07/2009 - 11:18 | 155207 Anonymous
Anonymous's picture

This is the rich getting a bailout by the Big banks holding up the market, When the market does drop only the not wealthy will be broke.

We bail out the banks...
the banks bail out thir friends....
Taxpayers get the bend-over-and-take-it.

Mon, 12/07/2009 - 11:40 | 155229 Mad Max
Mad Max's picture

Question: how are stock grants of various kinds accounted for?  Is it possible that this ratio is misleading because the insiders are acquiring their stock in ways that are not counted as purchases?

It's an alarming ratio in any event, but I would like to know if it truly reflects insider pessimism or if it's misleading because the insider acquisitions aren't being fully counted.

Mon, 12/07/2009 - 11:51 | 155243 Anonymous
Anonymous's picture

It's been like this since July, Tyler. I'd like to see the article that explains why the market continues to rise despite these types of facts.

Mon, 12/07/2009 - 12:25 | 155282 Anonymous
Anonymous's picture

what, you still do not know?

Mon, 12/07/2009 - 12:38 | 155301 quezrho
quezrho's picture

I don't think this particular point is as negative as it would be in normal times.  Back when stocks cratered, many execs either were put into ruin or scared shitless that they were going to be.  There was a very widespread incidence of individual liquidity issues that none of these guys felt ever before.  They didnt sell then because they thought the stock was too low vs the safety of liquidity.  Now that things are up, it is the reasonable thing to do to ensure liquidty issues dont happen again.  The flight to safety is due to history not expectations.  Now, that is not to say I am bullish, nor that these execs are.  It is simply tat this measure is not as meaningful as normal.

Mon, 12/07/2009 - 12:37 | 155304 Anonymous
Anonymous's picture

[Off-Topic] Somebody should take Carney over at Business Insider out to the woodhouse:

WARNING: A Centralized Derivatives Clearing House Will Create Invisible and Deadly Global Risk

http://www.businessinsider.com/a-derivatives-clearing-house-would-just-b...

Mon, 12/07/2009 - 13:03 | 155353 Anonymous
Anonymous's picture

My guess: Insiders know what's going on but say: Things are going allright, oh yeah!

Remember Enron when bosses were saying buy stock, it's allright, enron is an awesome company! Oh, yeah! Put your entire savings in enron stock.

And those same guys were selling all their stock as fast as possible.

So I guess that it is the same but in a much larger scale.

No one remember the wave of defaults predicted by some analysts in the 1st half of this year for 2010? Why not get the money in while the rally is ongoing and when it crashes they will buy low again to get richer.

As someone said above, the volume has dropped substantially in the last months.

Dow Jones rose to 14K after Bear Sterns failed. Instead of caution or take profits until it all gets brighter there was still people who thought it was allright and so now, maybe?

If you look at the last 20 years, the DJ from the '80 ahead rose like a rocket, that's not justified, it was all smoke, the world's biggest bank -Citigroup- went from 20s to less than a dollar in a couple of years after rising for years. P/E of SP were and keep beeing the higher of almost all times in the SP history.

My feeling is that just insiders are investing with head, all technical analysis is pure BS, insiders trade on fundamentals and those are who make the long term trend for companys.

Just my opinion.

Mon, 12/07/2009 - 14:33 | 155526 Anonymous
Anonymous's picture

I will never forget listening to an interview that the 'Motely Fools' had with Ken Lay months before it was exposed for the shell of a company it really was. The hosts of the show couldn't get their noses up Ken's a** far enough, telling him 'what a great investment the stock was' and 'what a well-managed company', etc., etc. Hopefully, that show was archived as it would be a hoot to listen to in light of what we know now.

Everybody wants, seemingly, to keep the plates spinning a little while longer, but eventually one is going to drop, and one may have done just that last Friday. How is it that ADP and Trim Tabs report UE numbers which are pretty close to the same figure and the BLS comes in nowhere close? I trust their numbers more than I do the governments.

Things must be worse than we can ever know in order for the government to release phonied UE numbers like they did on Friday. The lieing has become so blatant...and desperate.

Mon, 12/07/2009 - 18:48 | 155895 whwood75
whwood75's picture

 

While it seems possible to reach a similar result to that presented above regarding the ratio of insider buys to sells, I am not able to replicate the data which are presented.

I've never used FINVIZ before so it could be that I am being an idiot. But, when I go to the web site following the link provided (http://www.finviz.com/insidertrading.ashx) I have a choice to select one of three report formats: (1) Latest Insider Trading, (2) Top Insider Trading Recent Week, or (3) Top 10% Owner Trading Recent Week. The site then allows you to filter by (a) All Transactions, (b) Buy Transactions or (c) Sell Transactions. 

I generated each of the three report formats in the All Transaction format. In order to try to match the data in those reports with the green and blue background data provided in the report above, I search for three completely arbitrary records contained in the above report in each of the three formats: (1) Kudelski (OPTV), (2) HOVDE (CALC), and (3) LAWLOR (ORCC). Only the record for the Kudelski (OPTV) trade of 1,242,62 shares showed up and that only showed up in the second and third report formats. 

In addition, I downloaded the Buy and Sell data from the second report format ("Top Insider Trading Recent Week") in two batches (one buy, one sell) and put it into Excel and summed up the number of shares and the total dollar value for each. (Option excercises appear to get lost but they are relatively small change in the whole picture.)

Here's what these data showed:

Insiders sold 48,713,309 shares with a total value of $974,556,860.

Insiders bought 4,994,036 shares with a total value of $37,545,212.

The sale total is very close to the number shown but the buy total is more than three times higher. OK, so my ratio is 26:1. Big deal perhaps, what is the difference? And why don't the names foot?

Finally, what is the difference between the formats and which format is really meaningful. This question is worth asking because when I do the same buy / sell analysis I did above but use the first report format instead ("Latest Insider Trading"), I get these results instead:

Insiders sold 15,250,559 shares with a total value of $168,819,750.

Insiders bought 9,863,797 shares with a total value of $594,446,512.

(Note also: One single trade accounted for $500 million of the $594 million total.)

At the very least, I think a little more explanation regarding how the summary data were reproduced from the source cited would be helpful for those of us who are trying to learn how to follow and interpret these same data going forward.

 

Mon, 12/07/2009 - 19:09 | 155926 omi
omi's picture

Nothing screams conspiracy like pre-planned selling.

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