Businesses have announced buybacks of shares this season at a rate of more than $5 billion a day. The buyback boom has seen by investors as a sign of confidence among business executives.
According to an analysis of regulatory filings by TrimTabs Investment Research, insiders sold $8.4 billion of their shares in May and $9.2 billion in June. This is the biggest 2 months period of insider selling within a year.
Large banks such as Wells Fargo (WFC), JPMorgan Chase (JPM) and Bank of America (BAC) pour more money into repurchases. Each said they would buy back at least $20 billion of their own stock. Apple (AAPL) also announced plans last quarter for $100 billion in buybacks.
However, according to an analysis from SEC Commissioner Robert Jackson Jr, insider selling increases immediately after buybacks are unveiled. The study found that in 2017 and 2018, the percentage of insider selling more than doubled just after buyback announcements. Investors – please be on a look out for the insider sells.