(Bloomberg) -The stock price of the US company has soared to a record level this week, and it seems to get rid of concerns about tariffs, immigrants and inflation. However, what company executives are doing is obviously not so optimistic -they are selling stocks quickly.
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According to the emotional indicators of the number of insiders of buyers and sellers, as of January 22, at least 98 companies have purchased the company’s stock at least one insider this month. According to the data compiled Insiders sold the company's stock. Provided by the Washington Service. There are more than a week left in the transaction in January, and the sales ratio is 0.22. It is currently the lowest data since 1988.
Such a large amount of selling usually does not stimulate investors' confidence, because it indicates that the company's corporate leaders lack confidence in their own stocks. However, given many factors that may cause sale, including the overall market performance, stock value and personal reasons for executives, therefore should be reserved for such signals.
Mark Hackett, chief market strategist at Nationwide, said that in addition to the natural seasonality of the insider sales model, this sales also concentrated in large -scale technology companies that achieved huge benefits in 2023 and 2024.
"After the stock market rose sharply for two consecutive years, especially in the field of selling a large number of selling, it is natural to sell upward." "It is worth noting that this may indicate that people have high valuation stocks The confidence of the risk/return situation is weakening; the important thing is not to respond, because this may be part of risk control and may not reflect lack of confidence. "
This explains why another set of data helps to more comprehensively depict the company's emotions of its stock -the company repurchase.
Data from Birinyi Associates shows that the repurchase scale in January reached the highest level since 1999. Major US companies such as GM, Citi Group and Netflix have announced their plans to repurchase stocks this month.
Jeff Rubin, director of Birinyi, said that as of January 22, the US company has announced the repurchase of more than $ 48 billion, which will be the strongest January since 1999 and the strongest in the data One year.
In addition, in view of the fourth quarter financial report season, a large part of the US company is currently in the blockade period of repurchase stocks. However, Washington Service Corporation said that this usually does not substantially change the company's internal sales ratio.
MiLler Tabak + CO chief market strategist Matt Maley said: "There is often a large difference between insider activities and corporate activities, although the same person decides in these two things." In view of this One theory, the company's repurchase may also be a loser. He said that self -confident management is usually more willing to invest in business and develop it instead of returning cash to investors.
"However, when insiders decide to sell stocks, this is rarely a good sign," he added.
The stock market is now at a strange moment. On the one hand, as people are optimistic that inflation is taking the right road, the Fed will continue to reduce interest rates, and the stock index is hitting a new high. However, the huge risks brought by potential tariff wars, large -scale deportation and uncertain geopolitics are imminent, and all of them may push the price again.
Valuation, especially the valuation of technology companies, is also rising, making many people worry about how much motivation is the current rebound.
But at present, investors choose to pay attention to positive factors. On Thursday, the Standard 500 Index (^GSPC) closed at a record high. After many years of leading technology giants, more and more benchmark stocks have also begun to participate in the rise. Market professionals are expected to continue to improve this year.
Nevertheless, in view of the years of the company's insiders have indeed possessed early interpretation of the market direction, a large number of insiders of the company selling stocks may cause concerns. In August 2015 and at the end of 2018, the inside screen sales ratio rose sharply. The former happened before the market bottomed out, and the latter coincided with the market bottom. In March 2020, the purchase of insiders of the enterprise properly foreshadows the bottom of the bear market defeat.
The chief strategist of the Interactive Brokers Steve Sosnick said: "The growth of repurchase may be more like a long -term trend." He pointed out that with the equity -based employee salary becomes More and more popular, many repurchase aims to offset this dilution. He added that repurchase is also a tool for maintaining the stock price.
However, "in my opinion, inside selling is a more pessimistic data point," Sosnick added.
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