We downgraded 4 stocks this past week, upgraded 6. We lead with this sentence because “4” is the most number of downgrades we have had for many weeks. Insider sentiment has been deteriorating but that shift hadn’t generated many downgrades until this past week.
Insider trading volume has begun declining ahead of 3Q results. Some companies (mostly larger ones) restrict trading stocks 30-days before the end of the quarter, while others allow trading until just two weeks before quarter end.
The market declined every day this past week, but the declines were modest and the new low list actually shrunk. Despite the modest declines, the insider data improved slightly.
We view overall insider sentiment as neutral with six sells for every five buy trades (Sell/Buy Ratio 1.2).
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