Insiders are buying!

There is one group that appears to be buying when many others are selling during this current market turmoil. And they have a history of being more right than wrong about the market's direction.

We are referring to corporate insiders, a group that includes corporate officers, directors, and largest shareholders. You may recall that, three weeks ago, corporate insiders were selling at an abnormally high pace.


The sell-to-buy ratio for insiders now stands at 1.68-to-1. That's bullish, according to Vickers, since the long-term average level for this ratio is between 2 and 2.5 to 1.

To further put the current level of this ratio into context, consider that in the week ending July 22, this ratio stood at 6.43-to-1.

However, the insiders may not always be right. And even when they are, the market doesn't always respond as immediately as it did. Still, it is comforting that a group of investors who presumably know more about their companiess' prospects than the rest of us consider the low prices of their stocks to represent attractive bargains.

Source: Mark Hulbert, MarketWatch