Executives across the US are shedding stock in their own companies at the fastest pace in two decades, amid concerns that the long bull market in equities is reaching its final stages.
Corporate insiders — typically chief executives, chief financial officers and board members — sold a combined $19bn of stock in their companies through to mid-September, according to data from Smart Insider, a UK-based group.
That puts them on track to hit about $26bn for the year, which would mark the most active year since 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble. That projected total for the year would also set a post-crisis high, eclipsing the $25bn of stock sold in 2017.
Enthusiastic sellers of their own stock this year include members of the Walton family, who have sold a combined $2.2bn of shares in the Walmart retail empire. Executives at Estée Lauder, the cosmetics giant, and clothing group Lululemon Athletica also appear among the most active sellers, according to Smart Insider.
A Walmart spokesperson said the Walton family had been selling shares in the company to help offset possible further increases in its ownership percentage, which had risen to approximately 50 per cent due to Walmart stock repurchase programmes, and to partly fund charitable contributions.
Investors often use data on insider stock sales as a rough marker for the confidence of executives in their own companies’ prospects. Spikes in selling indicate that top figures in boardrooms around the country are taking advantage of high valuations in the US stock market, which has broken records this year but which faces pressures stemming from slowing global growth and Washington’s lengthy trade dispute with Beijing.
The rise in insider stock sales has been fed by “the uncertainty over global growth and the trade war and also because stock valuations are high,” said Mike Mullaney, director of global markets research for Boston Partners, which manages about $89bn in assets. “We just don’t know where we are right now, so why not play it defensive[ly]?”
https://www.ft.com/content/d95e12a6-dbed-11e9-8f9b-77216ebe1f17
What do they know that everybody else doesn't?
Corporate insiders — typically chief executives, chief financial officers and board members — sold a combined $19bn of stock in their companies through to mid-September, according to data from Smart Insider, a UK-based group.
That puts them on track to hit about $26bn for the year, which would mark the most active year since 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble. That projected total for the year would also set a post-crisis high, eclipsing the $25bn of stock sold in 2017.
Enthusiastic sellers of their own stock this year include members of the Walton family, who have sold a combined $2.2bn of shares in the Walmart retail empire. Executives at Estée Lauder, the cosmetics giant, and clothing group Lululemon Athletica also appear among the most active sellers, according to Smart Insider.
A Walmart spokesperson said the Walton family had been selling shares in the company to help offset possible further increases in its ownership percentage, which had risen to approximately 50 per cent due to Walmart stock repurchase programmes, and to partly fund charitable contributions.
Investors often use data on insider stock sales as a rough marker for the confidence of executives in their own companies’ prospects. Spikes in selling indicate that top figures in boardrooms around the country are taking advantage of high valuations in the US stock market, which has broken records this year but which faces pressures stemming from slowing global growth and Washington’s lengthy trade dispute with Beijing.
The rise in insider stock sales has been fed by “the uncertainty over global growth and the trade war and also because stock valuations are high,” said Mike Mullaney, director of global markets research for Boston Partners, which manages about $89bn in assets. “We just don’t know where we are right now, so why not play it defensive[ly]?”
https://www.ft.com/content/d95e12a6-dbed-11e9-8f9b-77216ebe1f17
What do they know that everybody else doesn't?
