Insider Observation

Insiders (senior management and execs trading shares in their companies) in the U.S. are keeping us busy, especially those filling out the green order tickets.

We upgraded 19 stocks where we see notable insider activity, with no downgrades. To come up with those 19 newly ranked stocks we analyzed approximately 150 insider purchases and 180 insider sales.

These figures show a meaningful improvement in insider sentiment versus just three months ago.

In the third week in May (also a busy month for insider activity), the figures would have been 90 insider purchases versus 270 insider sales, generating 9 upgrades and 2 downgrades. Over that time period, the S&P 500 is up 6% while the Russell 2000 slipped -2% and stocks on the 52-week low list have expanded to 940 Versus 353.

The 19 upgrades were from 7 sectors, led by Financials, Consumer Discretionary, Industrials. Those stocks have also been the ones that have been slipping recently. We have had fewer upgrades recently in Staples, Health Care, Utilities, Telecom.

One common theme we have been noticing going through the Form 4 filings are broken IPO’s and SPAC’s. We have seen some insider buying in those names, but most of the buying has been half-hearted and has not warranted upgrades. This is something we will keep an eye out going forward. The lack of investor interest in some of these names is an indication of declining sentiment, retail and professional. Many of these names lack strong sponsorship or investor awareness and there might be some opportunities ahead. We are hoping more enthusiastic insider buying will help point out some of those situations.

This is a short summary of our Highlights report for the US market which we send to our clients every Monday. If you are interested in it, please, email us to sales_admin@smartinsider.com or fill in the Contact form.

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