Insider Observations

Insider trading volume was moderate-to-heavy again this past week with a continued improvement in Insider Sentiment. Sentiment improved mostly due to a decline in insider selling. Insider buying increased 15% while selling declined by 33%. As a result, we view Insider Sentiment as neutral (30-day Sell/Buy Ratio 1.12 – almost one sell for each buy), but trending toward bullish.

Stocks have been more volatile these past few weeks, and many have had meaningful corrections, especially small-mid cap stocks. The Russell 2000 is down -11% over the prior four weeks. The improvement in the insider trading data has been notable, but not aggressive or convincing. Insider selling has declined, and at a time where we often find additional year-end selling for tax reasons, etc. This decline in selling is a positive sign. Insider buying has picked up, also a positive sign, but the buying has not been overwhelming.

We upgraded 14 stocks and downgraded 2 this past week. The upgrades were represented by Industrials/Materials, Banks/Inv. Banking, Insurance, Health Care, Software, Energy.


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