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Executives are selling stock as the market experiences its epic rebound Jul 26, 2020
 

Company insiders are dumping shares as stocks experience their epic rebound from the coronavirus recession. The sales are a major shift from the insider buying frenzy during the market bottom in March.

Among the sellers are the heads of blue-chip companies like UnitedHealth and BlackRock. 

The ratio of companies with insider buying compared to insider selling is at 0.27 in July, the lowest level since at least 2000, according to the Washington Service, a provider of insider trading and data analytics. The ratio has come down significantly since its 11-year high of 1.75, set in March.

“I think insiders broadly thought the March sell-off was over-pessimistic,” Raymond James analyst Tavis McCourt told CNBC. “As the market’s recovered, we’ve just seen more selling, less buying, as prices have become less dislocated.” 

The broader market has experienced an epic rebound from its worst first quarter in history caused by the Covid-19 pandemic and economic shutdown. After collapsing 34% to its March low, the S&P 500 rebounded in the second quarter and is now 46% off that low and positive for 2020.

In March during the market rout, corporate insiders were loading up on company shares, signaling the heads of U.S. businesses were confident in a recovery.

Big sellers

Morgan Stanley’s CEO, James Gorman, sold about 150,000 shares of the U.S. bank, worth nearly $8 million the day after the company reported second-quarter results that blew past analysts’ estimates on stronger-than-expected trading revenue, according to SEC filings. Shares of Morgan Stanley are up more than 85% from the bank’s 52-week low in March. 



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Source: www.cnbc.com
 
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