Wow! Insider Buy Activity Soars

We can well imagine that “wow” has been uttered by more than just a few people of late – about the spread of the coronavirus, the impact of the virus on share prices and the global economy, and about the change in lifestyle that has taken place in a mere matter of weeks. But for those of us who follow insider-sentiment data from Vickers Stock Research, recent data has led us to a “double-wow”. Two weeks ago, we pointed out that corporate insiders reacted to stock price declines by increasing their purchases of shares in the companies at which they work.

One week ago, we noted that the buying trend continued, and offered up the possibility that insiders might end up buying shares more often than they were selling shares – which is a rare event. This week, we are here to say that we wildly underestimated that possibility. Sell/buy ratios from Vickers are bullish when they are below 2.00. They are very bullish if they are below 1.00, which reflects the rare times when the number of insider purchase transactions is actually greater than the number of sell transactions. For example, a reading of 0.90 is very, very bullish. 

So what are the readings today? Based on very heavy transaction volume, Vickers’ benchmark NYSE/ASE One-Week Sell/Buy Ratio is 0.33 and the Total one-week reading is 0.35. Insiders are not just buying shares, they are devouring shares. Insiders behaved in a similar fashion in late-December 2018, after stocks crashed on Christmas Eve; in early 2016, when stocks also corrected; and in late 2008/early 2009, at the depths of the Great Recession correction. Those were spectacular times to buy stocks. Insiders seem to be telling us that today offers a similar opportunity. 

Highlights of massive insider share purchase in recent days have included: the CEO and other Directors at Dow Inc. (DOW) collectively buying $1.2 million worth of shares; Katherine Blackburn, a Director of Fifth Third (FITB), buying $994,000 worth of shares; Murry Gerber, a Director of Halliburton Co. (HAL), buying $1.1 million worth of shares; Andrew Feldstein, a Director of PNC Financial Services (PNC), buying $2.5 million worth of shares; and Charles Scharf, CEO of Wells Fargo & Co. (WFC), buying $5.0 million worth of shares.

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