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.

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achmachat's picture

reading ZH right after listening to the CNBC heads: priceless

Hard1's picture

Not just insiders trading.  The Hedge Fund strategy called "event-driven" makes no sense from a financial standpoint unless they have an informational advantage.

bigdumbnugly's picture

the surging inside is just the precursor to the cornholing to come later.

TruthInSunshine's picture

It's 2:29 and I guarantee that RoboTard BTFD yesterday, at the very close, or so he'll be along to tell us in the event this market closes green (or if some obscure equity, which he picks out from the crowd, does, in which case that will be TFD he bought).


Okay, it's 2:30. This is like watching baseball, where unless you are really bored, you only really want to watch the 9th inning.

SheepDog-One's picture

Too bad Robo also told us he was all-in back at DOW 12,700 for the big ride up when the debt ceiling passed.

JW n FL's picture

did you ever notice he always picks the winner after?

he never says I am Long this or short that ahead of time..

just after.

Give Reggie Credit! at least he gives out free info and backs it up! ahead of time!

Tyler to! gives us great info for FREE! ahead of time..

Robo comes in and makes shit up, after the close not before the open.

Stumpy's picture

Did Robo ever passed the turing test?

fuu's picture

He was saying something earlier about futures surpasing yesterday's highs. His new blood supply went straight to his head.

DaveyJones's picture

like peeling the pages in 1984

mkkby's picture

Excellent, ZH.  One of my "sleeping" friends sent me the CNBC story a few days ago as evidence the selloff was "just politics".  I knew it was BS, but had no data  to counter with... until now.

Strider52's picture

Slightly OT: BofA "Online" banking is now OFFLINE.

Takingbets's picture

Bank Run????  Someone from that Bank has called my house everyday for about 2 weeks now. They won't even leave a message telling me who to call back or what they want. I have no accounts with them but they did buy my refinanced mortgaged from Countrywide. Has anyone else here been experiencing these phone calls from them?

TruthInSunshine's picture

A little birdy told me that cash & cash equivalent withdrawals/redemptions are surging.

I would get more specific, but that's all the little birdy told me before flying away into the warm summer wind.

Takingbets's picture

Then their probably calling in the loan wanting payment in full!! Bahahaha!!!

snowball777's picture

Could be an offer of a cramdown, if only you'll put some ink on this non-MERS piece of paper...

JW n FL's picture

they are trying to start a bank run! and your truth is not helping their lie!


Bank RUN!! on B of A!!


Hurry! get your gold out of the Bank!! Oops! never mind! LOL

etrader's picture

The ES TA boxes are bouncing between two 78.6% on the 90min time frames.Normally the (TA) boxes programed to scale sell  the  upper ranges of 76.4 & 88.6 as a continuation entry.

Irish66's picture

Can you start a TV program, please!

Cognitive Dissonance's picture

Damit Tyler, why can't you leave CNBC's propaganda alone and just enjoy the unicorns and fairy tales?

Enough already. Why didn't I take the blue pill?


DaveyJones's picture

perhaps Marcus Bachman can cure you from your fairies addiction  

11b40's picture

...only if they can get more government assistance for their clinic.

They really have not appreciated all tis new attention very much.

Sunshine is such a lovely dis-infectant.

Dr. Engali's picture

Damn that's a lot of blue pills. If your erection lasts for more than four years please see your physician (and maybe a few of his better looking nurses)

snowball777's picture

Because you can already get it up?

Hephasteus's picture

Because the blue pill gives everything you create birth defects.

Caviar Emptor's picture

Yup. Corporate welfare was so rampant and free-wheeling during 2009-11 that major US corporations set all-time records for debt issuance: At a time when too much debt and over-leverage were the root cause of the cirisis!!!!

That and the record secondary stock issuance are the secret behind the "gobs of cash on the balance sheet" at the majors. 

ANd to make the stupendous stupidity complete, the best of it all: That cash is either just sitting and being used to build CEO golden parachutes and/or just being deployed to bolster overseas operations, further undercutting America's economic recovery. 

I consider this a total dereliction of the Fed's fiduciary responsibility to the US Treasury, US Taxpayers, US banks and US people. <----------------THis is how Ron Paul and others could, if they wanted to, break the back of the Federal Reserve with a Congressional investigation. If they don't do it, I doubt their sincerity. 

11b40's picture

Doubt?  For me, there is no doubt.  All these bozo's, including the "Paul's", have their schtick.  Ron Paul has been playing his for how many terms now?  They play it up to a point, then back off.  There is no intent to seriously challenge the status quo.  Criminals have been tightening their grip on Washington for at least 30 years, and now it is like a vise.

And before the Ron Paul lovers start bashing me, let me just say don't waste your time.  It would be better spent playing with the Obummer lovers in a game of mutual masterbation.  Both parties are corrupt; not a statesman among them.

Caviar Emptor's picture

+10. Ron Paul all but stated in his campaign memo earlier this year that he won't abollish the Fed. Something about not being able to do it all. Yeah right. He might be able to shake them down for a quick profit, though. 

Oh regional Indian's picture

At times like this, one can only wonder how many junks this little Ron Paul Diatribe would have bought.

The good old day.... or not.

Anyways, this surging insider buysing after a couple of years of insider selling, nice deal eh? Sell high, buy low, look good.

Patriots Buying the dip. Hah!

Coming Monday is the day though, I feel it.


fishface's picture

don' believe any statistic that you haven't forged yourself   ;-)

Cognitive Dissonance's picture

The only way you know if a forgery is real is if you forged it yourself.


bania's picture

execs pressing F5, central bankers pressing CTRL+P, is running the global economy really just a few simple keystrokes?

Stumpy's picture

You're missing one keystroke that I'm not sure who'll actually push: CTRL-ALT-DEL

The Wolf's picture

all done with one hand too... mighty impressive...

Stumpy's picture

I'm sure they programmed the keystrokes to a single big red button for maximum dramatic effect.

kito's picture

its all irrelevant anyway. its never been a sure indicator, one way or the other. ONLY jim cramer and laszlo birinyi are sure indicators...oh yeah, and grandpa buffett. he says NO SIGNS OF A RECESSION!!!! NONE, NOT ONE!!!! poor warren, little does he realize that all the staple items his company owns are being bought in record number for purposes of STOCKING UP in preparation for exactly what he says wont happen.

slaughterer's picture

kito, have you noticed how Obama puppets some of Uncle Warren's words during teleprompter hour?  And how networks roll out Warren to prompt the bathrobe brigade to buy some more K and JNJ.

monopoly's picture

Reading Zero don't need to listen to the idiot channel. Music works well during the trading day with a news feed.

Cursive's picture

Most CEO's manage the stock price, not the company. Form over substance is all that matters in 2011.

RockyRacoon's picture

Who was the fella on CBNC extolling all the insider buying -- the most he'd seen since the invention of the steam engine?   Where do they dig up these people?   Some sombitch is lying!

Ah!  Here 'tis:

While panicked investors have recently fled markets in a scale not seen since the last financial crisis, corporate insiders are aggressively buying.

 “Insider buying has accelerated dramatically to its highest level since the market bottom of March 2009,” according to Ben Silverman, Director of Research at InsiderScore, a firm that tracks buying and selling activity for corporate insiders.

According to Silverman, insiders have purchased over $400 million in company shares since July 1, with most of that activity occurring in the last 2 weeks when markets began to nosedive (the S&P fell over 15 percent during that time).


Somebody smarter than I will have to parse this crap.

Here's the video:

dwdollar's picture

Again, the rally today looks clownish.  If Wall Street wants to sucker in retail investors, this is how not to do it.

Stumpy's picture

RIMM (and a lot of others) look pretty healthy today. Healthy like in adrenaline+crack healthy.

SheepDog-One's picture

400-600 daily swings only create more loathing.

etrader's picture

Its not really low level retail their bothered about.

Its fund  redemption notice day tomorrow for Q3 withdarw,They desperately need Dow + 11K & SPX close to 1200 to try and steem a the bleed .

SheepDog-One's picture

Sure they have to keep 'tricking' everyone...DOW 11,000 is 'OK', under that its panic. Well good luck to them, theyll need it. Stock markets are TINY compared to the bigger problem that no one cares to buy bonds anymore.

slaughterer's picture

Yup, gotta stick a finger in the dam.

Cult_of_Reason's picture

To be fair to CNBC, it is not only CNBC.

Here is from CNN:

Insiders Go on Buying Spree

Silverman said insiders have made 35 purchases worth more than $1 million so far this month. The largest is by Harold Simmons, chairman of Titanium Metals (TIE), who spent $8.2 million to buy 600,000 shares of the company on Monday.