Insider Observations

Insider Sentiment is Bullish.

Insider Sentiment dipped into Bullish territory this past week (30-day S/B Ratio 0.95 which means almost 1 sell for each buy). Our trailing 10-day S/B Ratio has been bullish for the past 3 weeks, while the 30-day just declined below 1.0 this past week. It has been interesting to see how quickly the relationship between buying and selling has shifted over the past month.

The volatility in this data recently has been more responsive to movements in the Russell 2000, which has had a more difficult month than large cap stocks. The Russell 2000 is down -8.3% over the past 4 weeks vs. up +0.6% for the S&P 500, and looking back over the prior 12 months, Russell 2000 is up +16% vs. +29% for the S&P 500. Five weeks ago those trailing 12-month figures were +48% for the Russell and +34% for the S&P. Five weeks ago the 52-week high/low lists were 1,343/335, and this past week were 406/1,185.

All of this points to a meaningful pull-back in stock prices and insiders reacted quickly, buying more and selling less.

However, as quickly as sentiment turned bullish, it appears now to be heading in a different direction with the stock market rally this past week. We will watch to see if this trend back to neutral continues, although it will likely be during a period of declining insider activity with trading windows closing for many companies.

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