Insiders are now selling heavily for the first time in nearly a year


From Humble Student of the Markets:

Back on December 19, 2012, I wrote that investors shouldn’t be overly concerned about excessive insider selling:

There are a couple of one-off reasons that could account for the flurry of insider sales:
  

•  They are selling in anticipation of the end of the world, as predicted by the Mayan calendar; or

•  They are selling in anticipation of higher capital gains taxes in 2013, especially when it appears a fiscal cliff deal is near.

Assuming that the Mayan Apocalypse doesn’t happen this Friday (here is one way you hedge the end of the world), there is no need to panic just yet. Explanation #2 is a perfectly plausible reason for the rash of insider activity as 2012 draws to a close. In that case, I would wait for the insider activity data in January to see if insiders are indeed selling because of deteriorating corporate fundamentals, or for tax related reasons.

Now that we are into 2013 and any possible tax related selling is out of the way, we have an update on insider activity from Vickers – and it’s bad news for the bulls.

The ratio of insider sales to buys has surged from 6.67 to 1 in December, which was already at levels for bulls to be concerned, to over 9 to 1 today, according…

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