Insiders Still Buying Despite Murky Macro Outlook

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In the week ended September 2, we recorded 785 open-market insider trades at 476 companies having a total value of $870.3 million. Transaction dollar volume was 75.7% lower than the previous week and 33.1% higher when compared to insider trading activity a year ago. Purchases accounted for 29% of all open-market trades last week. Our insider sell-to-buy ratio, which excludes derivative conversions and certain other types of transactions, ended the week at 2.32, up from a previous reading of 0.72. On average, a sell-to-buy ratio below 4 is considered bullish, while readings above 7 are bearish.

For the past four weeks, insiders have purchased shares rather aggressively despite extremely high levels of macroeconomic uncertainty. We continue to believe that although the stock market is fairly valued, a slowing global economy and the lack of a concrete solution to the European sovereign debt situation will depress share prices in the coming months.

BlueTrader insider sell-to-buy ratio chart - September 2, 2011

For the 4th consecutive week, activity was the most concentrated in the Financials sector, where 189 insiders filed trades having an aggregate market value of $29.3 million. Rounding out the top three sectors were Technology (145 trades for $42.1 million) and Consumer Discretionary (122 trades for $306.4 million).

The largest open-market transaction of the week was in LGF stock, where Icahn Partners Lp, a large shareholder in the firm, sold 22,081,000 shares for a total of $154.6 million. The biggest buy last week was for 11,040,500 shares of LGF, worth $77.3 million. The net effect of these transactions is that entities connected to Carl Icahn are unloading their stakes in Lions Gate, which should serve as a bearish signal for the stock.

Largest Insider Buys of the Week

BlueTrader large insider buys - September 2, 2011

Largest Insider Sales of the Week

BlueTrader large insider sales - September 2, 2011

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