Problems with the mortgage and credit markets may have many individual
investors worried but insiders appear confident in a turnaround. During
the past eight weeks, insiders have been net sellers of a very low $300
million daily, according to their form 4 filings with the SEC. This
number is down from a $470 million per day average since problems arose
in July.
So, what stocks are insiders buying the most? The
answer: banks and insurance companies. That's right - insiders are
buying up the same stock that rest of the market is selling! In fact,
not since 1995 have so many chief executives bought so many shares in
their own companies as in this month. Many analysts see this as a
strong buy signal and a clear indication that they are confident in a
turnaround.
Among the biggest buyers were chief executives in companies like
Wachovia (NYSE:WB),
American Express (NYSE:AXP),
CIT Group (NYSE:CIT), and
American Capital Strategies
(NDAQ:ACAS). Meanwhile, several mutual funds have increased their
exposure in these same companies betting alongside insiders that shares
will recover from their current extremely discounted levels.
In
the end, the best opportunities are always present once blood is on the
streets. The public is afraid, hedge funds have sold out, and now
insiders are on the move buying up all the cheap shares. Opportunistic
investors may now want to do the same while shares are still cheap...
Related CompaniesWachovia (WB)American Express (AXP)CIT Group (CIT)