Even the slump in stock prices at the end of September wasn't enough to entice corporate insiders to buy their own companies' shares, suggesting a lack of confidence that may bode badly for the stock market as a whole, new data show.
The lack of buying, coupled with continued high-volume selling by company officers, directors and large shareholders, left insider sentiment for the full third quarter at the most bearish level in at least a decade, the research firm Thomson Financial said Monday.
Insiders, in open-market transactions during July, August and September, unloaded $36 of company stock for every $1 they bought.
The raw quarterly totals were $239 million in open-market purchases, the lowest since the fourth quarter of 1994. By comparison, insiders sold $8.7 billion of shares, the most since the second quarter of 2001, according to the Thomson report.
Some analysts consider insider transactions an important indicator of market direction, on the theory that insiders know better than anyone else the prospects for their own firms. Open-market purchases are tracked -- excluding shares acquired via options -- to gauge whether insiders view their stocks as bargains at market prices.