A $1 Million Insider CEO Buy With a 10% Yield (Yes, Please)
CEO and CFO buying signal confidence that a stock is undervalued, misunderstood, and/or turning a corner. This $1 million buy on Friday is a screaming Buy signal
Dear Old Friend,
The usual subjects emerged when Tim Melvin and I sat down for Thanksgiving last November. Orioles baseball… value investing opportunities after the October lows… and insider buying after the S&P 500 bounced off the 3,500 level.
The most important chart to watch - especially in periods of crisis - is from the executives and insiders at S&P 500 companies.
But October wasn’t a period of dramatic insider buying.
Historically, in times of steep downturns and liquidity challenges, insiders have roared with large amounts of buying - effectively calling the bottom in large panics in 2008/09 (GFC), 2011 (European Crisis), 2015 (China Crisis), and 2020 (COVID).
The chart below measures net buying/selling among executives on a dollar amount from SEC Form 4 documents dating back to 2007.
October insider buying largely aligned with the buying strength of the market bottom in December 2018 - after a 20% drop in the S&P 500 that month.
The orange circle represents the top …
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