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Insiders Pull Back From Buying in June Amid Market Uncertainty

As we previously highlighted in articles published May 20 and June 6, in May the ratio of insiders buying to insiders selling spiked to its highest level since the 2020 pandemic sell-off while the market tumbled. As the market has continued to struggle, how have insiders reacted so far in June?

As shown on the graph above, insider purchasing has begun to cool off, driving the ratio of insiders buying to insiders selling down to 0.69 so far this month. 786 insiders have purchased in June, down from 1,552 insiders in May. The number of sellers has also declined to 1,140 insiders from 1,590 insiders last month. As seen below, the ratio of companies with buying to companies with selling has similarly declined, falling to 0.71 (532 companies bought to 753 companies sold).

As mentioned in a previous post, the daily insider ratio dipped at the end of June as the market rebounded. However, as the market fell further in June, the insider ratio spiked again (see below). While June's full month numbers appear to be on track to finish lower than May's, this spike could show that insiders still have an appetite to buy when the market dips. Consequently, investors should keep a close eye on insider behavior if the market continues to slide.

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Research

The Washington Service Research Team

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