The Least Surprising Stat Of The Week: Corporate Insiders Are Dumping Their Stock

Submitted by John Rubino via DollarCollapse.com,

Here’s one for the "actions speak louder than words" file:

Massive insider selling spurs stock market concerns

(CNBC) – Corporate insiders have been selling their shares at near-record levels, and according to some, this could be a sign for outside investors to start selling as well.

Investment research firm TrimTabs reported on Wednesday that insider selling reached $7.6 billion for the month of November, the fourth-highest monthly level on record. For some this may be an alarming indicator, as corporate insiders tend to have more knowledge than public shareholders on the inner workings of the company, and what may drive stock prices up or down.

“Historically when insiders are selling heavily it’s not the greatest sign,” TrimTabs’ chief executive, David Santschi, told CNBC in a phone interview Wednesday. “I’m surprised given the valuations in the market that they’re not selling more than they are.”

According to Todd Gordon of TradingAnalysis.com, this combined with widening disparities in stock leaders and laggers could spell some short-term trouble for the market.

Why isn’t it a surprise that insiders are bailing? Because they see the reality of their businesses up close and personal. Revenues have been falling for the past year in many industries and have absolutely cratered in commodities. See the New York Times’ If it owns a well or a mine, it’s probably in trouble.

And after years of boosting reported profits with various kinds of financial engineering, corporations seem to have run out of tricks. Earnings have begun to reflect reality, and it’s not pretty:

Remove all the identifying information from this chart and the trend still screams “sell”. So the question, as noted above, isn’t why are they bailing, but what took them so long?

And remember that insiders are selling while the corporations they run continue to buy back huge numbers of shares with borrowed money. The implication? They’re supporting their stock in order to get out while the getting is good.

Comments

[clooney_art]

They prop up their stocks thro' buy-backs and then dump. Classic.

[localsavage]

Muppet slaying in  5...4...3...2...1

[GartmansTaint]

They all want to be first in line for the next Wu Tang Klan album...

[highandwired]

Screw that fucker Shkreli, they're buying Bitcoin instead

[yogibear]

Stocks are in bubbles of bubble land.

All that Fed printed cheap money pushed into assets.

[KnuckleDragger-X]

Coincidence, pure coincidence. They just need a little money for Christmas shopping.....

[THE COIN]

So your saying we will be  Limit Up by 3:30 ?

[ebworthen]

So who is buying?  Algo's tied to pension funds like CALPERS?  The tax donkeys with defined contribution plans?

Or is it the FED, doing "QE4" from the shadows?  Who the hell is buying the 72X EBITDA crocks of crap?

[KnuckleDragger-X]

That question must not be asked since it might lead to an honest answer and we all know how dangerous those are.....

[Niall Of The Ni...]

Mutual funds, blindly buying the dip in the face of all evidence that it's a nosedive straight into the ground, the insiders chanting Allahu Akbar at the top of their lungs.

[franzpick]

Dumping, along with everyone else:

http://www.investing.com/indices/us-spx-500-futures-advanced-chart

[BandGap]

Right through the magic 2020 line.

[CHoward]

Nothing to see here - move along - all is well - thank you.

[Agstacker]

Meanwhile MSM is telling the retail mom and pop investor everything is fine, in fact Cramer is saying he'd eat at Chipolte-

http://www.cnbc.com/2015/12/10/cramer-i-would-eat-lunch-at-chipotle-toda...

[WillyGroper]

Wish he would.

[franzpick]

(TDs: Maybe time to get The Big Crash Page ready ?)

http://www.investing.com/indices/us-spx-500-futures-advanced-chart

[Cautiously Pess...]

Yeah, but Cramer said to 'BUY, BUY, BUY' going into year end weakness.  I am so conflicted!  What to do?  I know, I will shoot Gartman a tweet and get his opinion..... 

[buzzsaw99]

and it's all legal. lmao.

don't worry about the maggots. they got plenty.

[katchum]

First buy back the stock higher and then sell your own shares of the company, great strategy.

[wanderer9641]

"First buy back the stock higher and then sell your own shares of the company, great strategy." - why bother - just direct sell to the company, take your options and get them back, then sell them back to the company again for as long as you can make the options loop work for you.

[mayhem_korner]

The corporate Siths have unleashed Order 66.

[arbwhore]

They dumped at record numbers in 2014 as well... yeah... record can always become recorder.

[Bill of Rights]

Republican implosion..

GOP preparing for contested convention

https://www.washingtonpost.com/politics/gop-preparing-for-contested-conv...

http://bestanimations.com/Military/Explosions/nuclear-atom-bomg-explosio...

[Arthur Schopenhauer]

People for the American way

Vote for this year's Equine Posterior Achievement Award

CAST YOUR VOTE NOW!

https://secure.pfaw.org/site/SPageNavigator/action.html?survey_id=10682

[Palladin]

Insider have been doing this for a long time.

Apple did it:

https://drive.google.com/file/d/0B51-74tGswAXbUdpQm9qNzdBQU0/view?usp=sh...

MCP did it. BTW, they are bankrupt now.

https://drive.google.com/file/d/0B51-74tGswAXYnhwU3dvRGU2Z0E/view?usp=sh...

Yelp did it.

https://drive.google.com/file/d/0B51-74tGswAXTXZBMnI3Yk5qRkk/view?pli=1

And this is just a few of them.

There are hundreds more just like these.

Good source for info on Insider Transactions

http://finviz.com/insidertrading.ashx

[Trucker Glock]

Many games to choose from in the casino.

An anonymous short-seller called a company a 'Ponzi-like real-estate scheme' and the stock has crashed 65%

http://www.businessinsider.com/short-seller-report-on-united-development...

[Bam_Man]

Trim Tabs

lol.

Haven't heard much from Charles Biderman lately.

Not since he was seen foaming at the mouth about AMZN's valuation when it was $325 a share.

[samsara]

The cashing out continues.

[The Ram]

So guys and gals, how much time do we have left before JQ Public is on to the fact that he/she owns lots of Enron shares??

1,2, 3 months.  I am just taking an informal poll?

[Lost in translation]

I started selling my remaining positions yesterday, and finished this morning.  I've left the casino. 

Wish I'd done so last summer, but oh well...

[tommylicious]

They're selling only to provide liquidity to their own accelerated share repurchase programs. 

[Arthur Schopenhauer]

I be gitin' outta heya, and be takin' me profits to buy dat jet airplane I always be wantin'.

[madcows]

alright, you're a CEO.  You've borrowed BILLIONS at low interest rates, in order to purchase your own stock, drive up the company value, and get yourself a bigass bonus.  A lot of these bonuses are in the form of stock.  So, now you decide to liquidate that bonus, and turn it into cold hard cash, before the bill comes due.