Insider Selling Is Happening, But Don’t Be Alarmed

I’ll preface this post by acknowledging that today�s Inside Scoop is about a cluster sell-off at Carnival Cruise Lines (CCL). Moving along…an article over at sister publication Marketwatch has come to our attention.

In the article, columnist Mark Hulbert (who also writes for us at Barrons.com once a month) says that based on data from the Vickers Weekly Insider Report, which is published by Argus Research, the sell-to-buy ratio last week was 9.20:1, meaning for every one share an insider was buying, nine were being sold at the same time.

When compared to the same ratio in mid-December, which stood at 8.38:1, Hulbert views this recent selling to be happening at �an alarming rate.�

Piqued by this theory, I scooted over to InsiderScore, which noted the following in a report it released, handily enough, today:

Market-wide sentiment is at a slight Sell bias as transactional volume is just beginning to flow heavily in the wake of the first big round of earnings announcement. The Financial sector has emerged as an area of concern, pace by actionable selling at high-profile Banks and Financial Services names.

Slight Sell bias. Alarming? Not enough to get anyone�s back up at InsiderScore.

Although most of what we have covered at Inside Scoop lately has been sales and cluster sales at companies, we note that the occasional actionable buy is still getting airtime from us — we wrote about Molycorp (MCP) on Monday, and noted insider buying at other companies, including Huntingdon Bancshares (HBAN) on this blog yesterday. There are smaller companies where convicted buying is happening.

Lastly, as food for thought, with the market being where it is, as Jonathan Moreland of InsiderInsights often says, �Selling into strength is one of the most common transactions there is.� Indeed, we noted unprecedented selling at some large financials, including Morgan Stanley (MS), recently that were based on just such a phenomenon. Perhaps, with the market’s strong move up recently, it’s less alarming than a case of taking advantage of some of what’s on offer.