For many years we have analyzed the reported daily  “buys and sells” of the officers and directors (insiders) of the US and Canadian stocks to help determine if the stocks could be undervalued or overvalued. 

As you probably know, the officers and directors are required to report within two business days any of their purchases or sales of their own companies’ shares. It is a criminal offence in Canada and in the United Staes not to report transactions.

Overall, we used the largest twenty buys and sells for two weeks ago and it was not positive, rather it was alarming, In the largest twenty transactions for the US stocks the insiders bought a total of approximately $37 million in dollar value of their own companies’ stocks; for the same period they sold $622 million in dollar value of their own personally held shares in their own companies’ stocks. 

And in the following weeks there were no positive indications from the “insiders.The most informed of all investors purchased approximately $79 million in dollar value, while for the same period; they sold $524 million in dollar value of their own companies’ shares. So again in dollar value, we saw six to seven times in dollar value insider sells to one insider buy. It suggests that some profits should be taken off the table. Yet for the insiders in Canadian stocks, for the resource and commodities type stocks such as gold and silver, there is little insider selling (officers and directors) at all. As well, there has been consistent accumulation by their officers and directors (insiders). 

Our conclusion is still that we are in a long term bull market in commodities! Generally and historically if we have a bull market in commodities, we generally do not have a bull market in the industrial stock market at the same time.Last week the negatvie insider trend in US stocks continued with $30 million dollar value buying iand approximatley $378 million in dollar selling.