How Reliable is Insider Selling? Not Very
We look at insiders buying and selling of their companies’ stock. Analyzing insider selling can be tricky, though, and does not guarantee a negative outlook. People sell for a variety of reasons: there are planned sales, employees retiring, and people just wanting to cash in their returns but they buy for one reason, to make money. It’s normal to see insiders selling on a regular basis. That doesn’t raise red flags. However, we look for unusual patterns: insiders selling at 52-week lows (not something you want to see in a stock you own), cluster selling, and smart insiders(those that have exhibited … Read more