Insider Buying Trend Gives the 'All Clear'
Tweet
Share
E-mail
A few days ago, before the mainstream financial press picked up on it, the team at StreetInsider.com noted the heavy insider buying we were seeing. This trend is continuing.
At StreetInsider.com we only track "notable" insider trades, or ones we feel can make a meaningful market impact on a stock. All the others are thrown out. Since the beginning of August we've seen 71 notable insiders buys. This is more than all of April, May, June and July put together!
The action is unequivocal and convincing. But what does it mean?
In the fall of 2008, following the Lehman Brothers collapse, we saw the start of similar action, which continued through the market bottom in March 2009. In fact, on November 14th we went on CNBC's Fast Money to tell the world of our findings. What did stocks do after that?
On that day, the S&P 500's adjusted market close was 873.29. Stocks bounced around to end the year slightly higher at 903.25, but then it was a straight drop during the first part of 2009. Stocks didn't bottom out until March 6th at 666.79 (down 24%). However, one year later the market was at 1,093 (up 25%) and currently it is at 1,160 (+33%).
While it can be debated whether we are re-living 2008 (this time with Euro banks being the main issue), the data above is compelling. If we are in a 2008 re-mix, buying now will give you more hurt near-term but over the mid-to-long-term you will look smart and an "all clear" can be given. Of course if we are not re-living 2008, buying now is a no-brainer.
At StreetInsider.com we only track "notable" insider trades, or ones we feel can make a meaningful market impact on a stock. All the others are thrown out. Since the beginning of August we've seen 71 notable insiders buys. This is more than all of April, May, June and July put together!
The action is unequivocal and convincing. But what does it mean?
In the fall of 2008, following the Lehman Brothers collapse, we saw the start of similar action, which continued through the market bottom in March 2009. In fact, on November 14th we went on CNBC's Fast Money to tell the world of our findings. What did stocks do after that?
On that day, the S&P 500's adjusted market close was 873.29. Stocks bounced around to end the year slightly higher at 903.25, but then it was a straight drop during the first part of 2009. Stocks didn't bottom out until March 6th at 666.79 (down 24%). However, one year later the market was at 1,093 (up 25%) and currently it is at 1,160 (+33%).
While it can be debated whether we are re-living 2008 (this time with Euro banks being the main issue), the data above is compelling. If we are in a 2008 re-mix, buying now will give you more hurt near-term but over the mid-to-long-term you will look smart and an "all clear" can be given. Of course if we are not re-living 2008, buying now is a no-brainer.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Activist Ancora Now Seeks to Buy H.B. Fuller Adhesives Unit - Bloomberg
- Londian Wason New Energy Tech opens at $26, above IPO price of $22
- S&P 500 EPS growth above 20% is rare. Why 2027 may be at risk
Create E-mail Alert Related Categories
Insider Trades, Insiders' Blog, Trader TalkRelated Entities
Lehman Brothers, Standard & Poor'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
