BlueTrader: Insider buying reaches two-year high; stocks remain under pressure
U.S. stocks still face significant downside despite high levels of insider stock purchases
MONTREAL, Quebec, Canada – August 17, 2011 – BlueTrader, an investment intelligence provider that analyzes insider transaction data to inform improved investment returns, reiterated its warning of May 2, 2011 of a further correction in U.S. equities.
“We forewarned as to a correction in U.S. equities in early May, and, although stocks have bounced smartly from their August 8th low, we view the correction as being far from over,” said Jason Moschella, Chief Research Officer at BlueTrader. “Weak earnings guidance from major multinational firms, slowing global growth, and heightened risks in the Spanish and Italian government debt markets point to continued downside.”
In a research note to clients published August 14, 2011, BlueTrader reported that the number of open-market insider buy transactions was the highest since March 2009. At the individual company level, there is strong evidence that firms whose insiders buy shares on the open market tend to outperform. For the week ended August 12, 2011, BlueTrader recorded 1133 open-market insider trades at 594 companies having a total value of $971.6 million. Transaction dollar volume was 29 percent lower than the previous week and 0.6 percent lower when compared to insider trading activity one year ago.
In addition, BlueTrader’s proprietary market-level insider transaction indicators have been in bullish territory for the past two weeks.
“We view continued aggressive insider purchases as a signal that stocks are now reasonably valued,” continued Mr. Moschella. “Still, insiders may be early in terms of calling a bottom, as was the case in late 2008 and early 2009. Valuations could overshoot to the downside given the high degree of macroeconomic uncertainty. Net-net, while equities are now fairly priced relative to historical averages, we believe that we have not seen a firm bottom in stock prices.”
For detailed insider transaction intelligence and to sign up for real-time BlueTrader alerts, visit: www.bluetrader.com .
BlueTrader is an investment intelligence provider that analyzes insider transaction data to improve investment returns. BlueTrader features a comprehensive and proprietary suite of analytics and research products that deliver unbiased, timely and concise investment information proven to significantly out-perform market peers. BlueTrader monitors insider transaction data, processes and rates it, and then delivers only the most relevant buy or sell information to investors in real time. BlueTrader’s alerts and analytics tools are tailored to each investor’s needs, along with research on current and emerging trends – all accessible from a single, easy-to-user interface. For more information, visit: www.bluetrader.com .
BlueTrader™ is not affiliated in any way whatsoever with the U.S. Securities and Exchange Commission (S.E.C.) BlueTrader™ is not a financial advisor, and does not recommend the purchase of any stock or advise on the suitability of any trade or investment. Stock trading and investing can cause loss of capital, and you should always consult with a professional financial advisor before trading or investing.
- Contact Information
- Jason F. Moschella, M.Sc., CFA, PRM
- Chief Research Officer, BlueTrader, Inc.
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