Insiders’ Outlook

Insiders are generally more right than wrong about their corporation’s future financial performance. They tend to be ahead of the market, which makes them an excellent source for market analysis.

Who are insiders? 
No-one should know more about a company’s prospects better than the “insiders” such as the CEO, CFO, Officers and Directors. It should come as no surprise therefore that Wall Street pays much attention to insider purchases and sales. We have developed a variety of applications to help us with our market forecasting and industry work.

An insider’s view of the market
We have observed that insiders tend to be right, but are way too early. Using this premise, we have developed a one year forward-looking market forecast which provides not only a very different perspective from traditional trend following forecasts but also a valuable input for our overall market view.

Deriving a market view from industry scores
We monitor the numbers of “optimistic” industries by comparing the current group “score” with our historical records for that group. This is run on a five year quarterly cycle.

Insider Stock Action
We highlight stocks with particularly large amounts of insider buying and selling. As with the market and industry models, the timing of insider action is often early and provides an opportunity to investigate the stock in more depth before a price trend becomes apparent.

Example, January 2003  “we see excellent insider buying in GE”