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Tech Insiders: Abandoning Ship…
2003-07-11 08:18:00

http://www.bcaresearch.com/public/highlights.asp?pre=PRE-20030711.GIF

Corporate executives at technology companies continue to send a bearish message about the durability of the latest rally in this sector. The tech insider sell/buy (S/B) ratio exploded upward in June, setting a new cyclical high. Importantly, the surge in the S/B ratio was not just a function of increased selling activity: net purchases shrank to a meager $2M in June, well below the average of the past few years. In other words, insiders are not endorsing recent tech stock strength. However, insiders may not be providing a totally clean signal: executives are probably quicker to lock in profits than in the past, as the memory of the post-2000 share price crunch still looms large. In addition, most surveys of business sentiment continue to firm, which is supportive of tech stocks and runs counter to the message sent from the S/B ratio.