Insiders bullish on US equities
This interesting article from dollardex seems to trigger something that i saw recently.
Dollardex:
According to BCA Research, “the recent increase in insider buying activity, especially relative to the downtrend in selling, during the weakness in the broad market since May is a notable development.”
They argue that executives would not commit their own capital unless they were reasonably positive on their profit outlooks and share price valuations. This would suggest that even with a housing/energy induced consumer spending slowdown, it makes sense for investors to stay bullish on US equities, or at least maintain a decent exposure.
On the other hand, analysts have probably revised up their earnings expectations too far recently — a continuing weakness in leading economic indicators points to a stream of downgrades in the months ahead. Overall this means the performance of equities generally could suffer reverses as analysts cut earnings estimates.
A possibly strategy to accommodate these conflicting signals is to buy into US or blue-chip global funds (and tech funds) whenever there is bad news or a market drop. This would suit the medium to long-term investor who is not going to be ruffled by the high volatility we expect.
Compare this to the number of new purchases found on Guru Focus. Since the may corrections, many gurus have been substantially increasing their holdings. does this mean it bodes well for US market?
Related posts:
- Morgan Stanley issues triple sell warning on equities
- Hong Kong insiders dumping shares just like US Insiders
- Emerging Market Equities: Breakout!
- David Rosenborg:Net Outflows from equities to bonds
- Jeremy Grantham is bullish on Lumbar, Emerging mkts and US Blue Chips
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