“Insider selling at the biggest technology companies hit a record pace over the last six months even as investors snatched up shares, pushing the Nasdaq CompositeIndex to a 12-year high.
More than 55 million shares were sold versus 1,780 shares bought for a sell-buy ratio of an eye-popping 31,109 to 1 at the 10 biggest tech companies, includingMicrosoft, Oracle and Qualcomm, according to Alan Newman, editor of the Crosscurrents newsletter and market analyst for 49 years.
“Insider activity confirms the rosy scenario indicated by prices is only an illusion,” wrote Newman in his latest letter. “Insiders have no confidence in their own companies. While prices appear to be indicating an all clear, we remain in one of the most egregiously speculative phases ever seen.”
In fact, insider selling‘s track record as a leading indicator has been mixed. Large amounts of selling by executives have taken place during long and vigorous rallies in the past. Plus, tech companies pay a lot of employees in options or stock grants, skewing the selling numbers for that sector in particular.
Still, should the numbers getting this massive raise red flags for new tech investors?
Those new investors were burned Thursday as Microsoft and Intel got slammed after research firm Gartner said that PC shipments fell 11 percent last quarter. The Nasdaq retreated from its high as the rest of the market held firm….”
