Insiders in the US aggressively ramp up selling, Trim Tabs says

One of the most widely-followed trends by equity investors to help inform their decisions is now flashing a “cautionary long-term signal” for Wall Street, according to new research from Trim Tabs.

In November so-called company ‘insiders’ “aggressively ramped-up” the pace at which they sold shares in the companies at which they work.

They took advantage of October’s rally on Wall Street to sell $7.6bn in stock, the second-highest volume year-to-date and the fourth-highest in the past three years.

“The last time insider selling was higher was back in May, and the S&P 500 fell 6.4% in the following three months,” said Trim Tabs chief David Santschi.

Santschi emphasised that the selling came amid a “staggering” $1.37trn spent by US corporates in share repurchasing schemes.

“Amid a slow-growth economy, insiders are spending loads of shareholders’ money on takeovers and buybacks to boost revenue as well as earnings per share, but they’re selling hard with their own money.”