The Rising Influence of Rising Affluence

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Absent From Trump Rally in Stocks? Insider Buying

http://www.wsj.com/articles/insiders-at-russell-3000-companies-unload-shares-after-election-1480606369

Far more executives at Russell 3000 companies have unloaded their own stock in the past three weeks than have bought

A wave of investor money has propelled U.S. stocks to records since Donald Trump’s presidential-election victory. But one group has been missing from the buying frenzy: corporate executives.

A total of 3,500 insiders at Russell 3000 companies have unloaded their own stock in the last three weeks, while 467 purchased shares, according to data from The Washington Service, a Bethesda, Maryland-based provider of insider trading data and news. The number of sellers was higher than the monthly average of 1,832 sellers this year through October. Sellers have also increased from the comparable year-ago period, and buyers have decreased.

“It reflects uncertainty over what the economic and regulatory landscape will look like next year,” said Ed Clissold, chief U.S. strategist at Ned Davis Research. “We’ll need to get clarity on what Trump will be able to implement.”

Insider buying and selling doesn’t necessarily presage gains or declines in a given firm’s shares, of course. But Wall Street watches the data because insiders are understood to have the best information about their companies’ prospects, and are also typically veterans of their industries with longer-term horizons.

While they have historically tended to sell more than buy, their behavior since the election diverges from investors, who have exhibited a rapid shift in sentiment and poured money into equities.