Opinion: I value Insider Buys as much more valuable indicators than Insider Sells. There are lots of reasons why someone might sell, and not all indicate a dissatisfaction with the stock: orthodontist bills, retirement, new roof, college expenses, divorce, new Ferrari, etc. But there is only one reason someone buys shares and that is because he wants them more than he wants the cash.
So, I tend not to read as much into "Sells" as I do "Buys".
Having said that, I cannot at this point venture a guess about what is in the minds of any specific Form 144 prospective sellers.
It could be that they want to be free to sell the shares when they balloon very soon because things are going well -- bullish for us.
Or that they have some tax losses which exceed the amount which can be offset against existing gains, so they need to generate some gains in order to be able to use those tax losses this year (instead of carrying them forward) -- neutral to slightly bearish for us.
Or, based on what they know, they are just sure that there is enough bad news coming that the stock will tank, and so they want out -- bearish for us.
Another factor to consider is whether each individual has a history of selling (in which case one single filing is not too bad), how close to the management the seller is, what his basis is, and how many shares he retains after any possible sale.
For instance, Bill Gates sells Microsoft stock virtually every month, and most people do not consider that to be a bad signal.
JSb. |
