Insider Selling Increases on the Heels of Q2 Earnings Reports⦠Time to Follow the Smart Money out the Door? By Eric Roseman August 19, 2009 According to InsiderScore.com, U.S. corporate insider selling reached its highest levels for the week ending August 11 since June 5, 2007. Insiderscore.com tracks publicly traded buying and selling activity in the United States, and itâs the best service Iâve seen focusing on this discipline. The recent data continues to paint a bearish picture on insider trends. Insiders, who must file with the SEC after making a transaction, have been aggressively selling company shares since last spring. Insiderscore.com reports that companies marked by selling, outnumbered those with buying by more than a 2-to-1 ratio â the first time thatâs occurred since the week ended February 27, 2007. Insiders at publicly traded companies know their company prospects better than anyone else â better than Wall Street analysts, money-managers and traders. They see the numbers and orders every day and have a great gauge of where company revenues are headed. Ahead of earnings or big changes in business plans affecting gross revenues insiders will typically file with the securities authorities following cash-based purchases of company stock. If an insider is buying itâs because he or she believes share price are heading only in one direction â higher. But the trend in net selling since last spring is a bad omen for a market lacking the conviction from its most ardent supporters â executives and directors of publicly traded companies who usually vote with their wallets. Are the insiders right? I canât argue with the trend in big money â theyâre bearish and taking money off the table. I would too.