The Latest In Aggregated Insider Trading

The current bear market has many concerned, and for good reason. The S&P 500 has fallen 24% from the high of $4,800 this past December, and the August run looks to have slunk away as quickly as it appeared. The gains brought in August have now totally evaporated, and the economy is now at a level below the previous low of June. The last time the economy suffered an end-of-year loss this bad was 2008. 

Given these sobering developments, how have insiders responded? The latest piece from Mark Hulbert at MarketWatch summarizes our findings. Namely, overall insider sentiment is still down. When the market declines, a healthy response would be to see that coincide with insider buying, as that would indicate that insiders view the downturn as temporary, wanting to purchase their own shares at a relative discount. Instead, insiders are buying at a level below what they did in June, indicating that they are not as optimistic about this downturn. That is not an encouraging sign. You can see this in the following graphic, with the June peak circled in black.

Last week, I wrote about what kind of information insiders actually trade on. That is relevant here as well. Insiders will be looking forward to the months ahead, anticipating how likely interest rate increases and other macroeconomic developments will affect their businesses. Hence, we can learn a lot by studying them.

As Mark noted in the article, there is a caveat to the overall bearish signal from insiders - certain sectors, which we refer to as "green shoots", are experiencing recent, positive net insider buying among this overall slowdown. These sectors are Information Technology, Industrials, Financials, Real Estate, Communication Services and Consumer Discretionary, which happen to be sectors that are particularly sensitive to interest rates. Their disassociation from the overall trend indicates that insiders in these sectors feel that the Federal Reserve's forward guidance will be sufficient to control inflation, and that they don't expect any upward surprises on this front. Two firms for each of those sectors are presented in the article and I share that table here.

I'd like to go through these companies which are leading positive sentiment in these "green shoot" sectors and give a little more context. I'll share which insiders are selling and what size purchases they are making. It's important to note that all insiders are not created equal - certain insiders have greater access to material information and that means that trades from certain insiders are perceived as conveying stronger signal than from others. Additionally, in evaluating which insiders are potentially optimistic, we only want to consider companies that have zero selling. Even though some companies might have a small number of sales against large amounts of purchases, Professor Seyhun's research shows that it's not as informative when insiders engage in a mixture of buying and selling. Companies where insiders are buying only, with no sales, tend to be more informative. Here is the list:

AUDACY, INC. (AUD)

Audacy featured purchases by Chairman, President and CEO David Field. Five separate transactions were registered between September 16th and September 23rd, totaling nearly 223k shares. Audacy is in the Communication Service sector. Audacy's stock price is currently at a 5-year low.

Globalstar, Inc. (GSAT)

Two highly informative Globalstar insiders made stock purchases in September. CEO David Kagan purchased 25,000 shares in a single transaction dated September 12th, and General Counsel Barbee Ponder purchased nearly 30,000 shares in three separate transactions on September 9th, 12th, and 13th. There were also several other purchases by directors. Globalstar is in the Communication Service sector. Globalstar's stock price is up to nearly $1.70 from the end of 2020 when it was in the 30 cent range.

Luminar Technologies, Inc./DE (LAZR)

Board Chairman, President and CEO Austin Russell made several purchases throughout August and September totaling ~270,000 shares. Luminar is in the Consumer Discretionary sector. Luminar's stock price is currently at a low from highs in February 2021.

VOXX International Corp (VOXX)

President and CEO Patrick Lavelle purchased 27,000 shares in September and over 65,000 shares in July. Voxx is in the Consumer Discretionary sector. Voxx's stock price is currently down 68% from highs in February 2021.

B. Riley Financial, Inc. (RILY)

Chairman and Co-CEO Bryant Riley purchased around 37,500 shares in a handful of transactions on September 14th and 16th. Fellow Co-CEO Andrew Moore purchased 5,000 shares in a single transaction on September 7th. B. Riley Financial is in the Financials sector. RILY's stock is down 6% the past month.

Rocket Companies, Inc. (RKT)

CEO Jay Farner and board member Matthew Rizik have been steadily purchasing shares throughout the summer and into the fall, with Farner having acquired several hundred thousand shares in September. This comes as Rocket Companies reaches a 5-year low in their stock price. Rocket Companies is in the Financials sector.

APi Group Corp (APG)

Board member Anthony Malkin purchased over 100,000 shares throughout September. APG's stock price has reached lows not seen since July, 2020. APi Group Corp is in the Industrials sector.

Applied Blockchain, Inc. (APLD)

CEO and Chairman Wes Cummins picked up 100,000 shares at the end of August and was joined by CFO Daivd Rench, who purcahsed 3,500 shares. APLD's stock price has not been lower than current levels since April, 2021. Applied Blockchain is in the Industrials sector.

Bridgeline Digital, Inc. (BLIN)

President and CEO Roger Kahn purchased several hundred thousand shares throughout the second half of August and into September. Bridgeline Digital's stock price is also facing an unprecedented low, falling from over $6,000 more than a decade ago to less than $2 now. Bridgeline Digital is in the Information Technology sector.

CalAmp Corp. (CAMP)

President and CEO Jeffrey Gardner purchased 20,000 shares in September as Calamp Corp reached a share price not seen since the bottom of the market in April, 2020. Calamp Corp is in the Information Technology sector.

American Assets Trust, Inc. (AAT)

Chairman and CEO Ernest Rady purchased over 100,000 shares in September. AAT is quickly approaching lows not seen since fall 2020. American Assets Trust is in the Real Estate sector.

BRT Apartments Corp. (BRT)

President and CEO Jeffrey Gould purchased several tens of thousands of shares in September. Unlike several other companies on this list, BRT's stock price has been climbing steadily since hitting a low in fall of 2008, though the stock has been down almost 20% since August. BRT Apartments is in the Real Estate sector.

Further elaboration on the above, specifically on which narratives insiders are supporting with their recent actions is shared with subscribers of insidersentiment.com. Intended for money managers, day traders, and investors of any size, insidersentiment.com tracks aggregated insider trading indicators for a variety of investment styles and can help you stay ahead of the market.