Insider Selling Jumps to Highest Level Since 2007

April 24 (Bloomberg) -- Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.

Gap Inc.’s founding family sold $45 million of shares in the largest U.S. clothing retailer this month, according to Securities and Exchange Commission filings compiled by Bloomberg. Daniel Warmenhoven, the chief executive officer at NetApp Inc., liquidated the most stock of the storage-computer maker in more than six years. Sales by the co-founders of Bed Bath & Beyond Inc. were the highest since at least 2001.

While the Standard & Poor’s 500 Index climbed 28 percent from a 12-year low on March 9, CEOs, directors and senior officers at U.S. companies sold $353 million of equities this month, or 8.3 times more than they bought, data compiled by Washington Service, a Bethesda, Maryland-based research firm, show. That’s a warning sign because insiders usually have more information about their companies’ prospects than anyone else, according to William Stone at PNC Financial Services Group Inc.

“They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”

Insiders Sell

Insiders from New York Stock Exchange-listed companies sold $8.32 worth of stock for every dollar bought in the first three weeks of April, according to Washington Service, which analyzes stock transactions of corporate insiders for more than 500 institutional clients.

http://www.bloomberg.com/apps/news?pid=20601213&sid=arl3VgxA0FAA&refer=home

Why are they selling ? I thought "the worst" is over...?

 

I'll be accumulating JUN09 15 puts as the opportunity becomes more evident. Very bearish on GPS--time might not be right though.

 

Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.
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I'm having trouble translating that opening sentence.

Insiders decided to capitalize on the steepest stock market gains since 1938 to "realize" their losses?

chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. ... "I’d prefer they were buying.”

Really, insiders should double down. Just like the Fed does.

It would be much easier to get a locate to short if you had a nice inventor of buyers, Oh well....

 

insider selling is almost always wrong.

 

Keep a jaundiced eye on this stuff. But it does seem that it will take some heavy selling to get back down to the lows.

 

Pretty accurate statement. Quite a few guy's have gone through SEC filings and concluded that insider buying is a decent sign of strength but insider selling means little.

Reason? Management generally buys for only one reason. They think their stock is below value. Sellers may have reasons other than value. Hedging options, tax considerations even personal reasons like divorce or estate planning. Plus the SEC isn't going to come down as hard on an insider for buying in front of good news as they would for selling in front of bad news....

 

I agree. But so is insider buying. Go look at all those Big Bank executive buys back late last year, and early this year. Some at Citigroup thought that $15 was the "steal of a lifetime".

lol

 

I can list a litany of bad insider buys. Joseph at Drexel took his bonus in stock instead of cash just weeks before they were toast. And I believe even Ken Lay bought the dip. We're not talking in absolutes or individual cases but as a class insider buying has more indicative merit than insider selling......

 

90% bearish on this piker site? Why is that always the case. Miserable people that can't make money perhaps?