Some Perspectives On "Surging" Insider Buying

Tyler Durden's picture

Based on repeated soundbites played on Comcast's financial comedy channel one would be left with the impression that corporate insiders have completely stopped managing their companies and all they do is sit feverishly in front of E-Trade, and punch F5, buying up their own stocks with relentless abandon. Alas, this is about as far from the truth as BLS data from reality.  Below are four charts that present the full picture.

First, insider buying on a daily basis. Noe the market value for All purchases which peaked at $8 million and has since plunged almost back to historical trendlines of, well, $0.00. Yes, the whole "bull" story is based on roughly $20 million worth of insider purchases in the past week. That's right. $20 million. That's in line with what one CEO makes per year, and a little less than FoxConn raises during one bake sale! And furthermore, the buying is drying up, even as the market continues to sink to new lows, which means that after the first plunge spurred insiders to buy, buy, buy, the following subsequent plunges may have forced them to reevaluate their enthusiasm.

How about selling? Well, here's the data. Once again, keep an eye on the axis: the peak is about $140 million... a little under 20x more than the peak buying. Just keeping things in perspective here.

How about on an average basis? Here is the monthly moving buying average: just about $1.3 million.

And selling. Once again: compare the axes, and the trailing selling average, which happens to be a little over 20x higher than buying.

So, uh, yeah.