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As markets struggled in March, we highlighted a shift towards buying in aggregate insider trading trends. Since then, markets have continued to decline and insider activity has shifted even further towards buying, far outstripping the March ratio of 0.60 in terms of companies buying to companies selling. So far this month, that ratio has surged to near parity between companies buying and selling. As shown on the graph below, the partial-month ratio has risen to 0.95 (611 bought to 641 sold), the highest level since the pandemic-related dip in early 2020. When looking at insiders buying to insiders selling so far this month, more insiders have purchased than sold for the first time since March 2020, for an insider buy/sell ratio of 1.03.
As shown on the chart below, the daily company ratio of buying to selling also shows a clear upward trend as the market sell-off has gained steam. The daily ratio highlights the magnitude of the shift towards buying across companies, with a recent day where there was three times as many companies with buying activity than selling activity.
While we highlighted the uptick in both August and March, the recent shifts by insiders towards buying seem to be the most significant uptick since March 2020. Despite the recent pervasive pessimism regarding the market, insiders increasingly seem to be taking advantage of the downturn to load up on shares of their companies. This could represent positive signal regarding the long-term recovery for both the market and individual stocks that are seeing an uptick in buying.
[Click here to view companies with multiple recent insider purchases]