Study: When Corporate Insiders Sell Stock at a Loss, Watch Out
When considering whether to buy stock in a company, investors often look to the trading activity of the company’s top executives. If the CEO or CFO has recently made large purchases of company stock, investors tend to assume the stock price is about to go up; if they are selling stock, on the other hand, the meaning is less clear.
A new paper by the University of Notre Dame’s Peter Kelly takes a rigorous look at the predictive power of insider trading — not the illegal kind, which is based on access to information not in the public domain, but the normal trading activities of corporate executives.
Read more here.
November 5, 2018