Some company directors and shareholders can have significant influence over share price performance or possess particularly astute market timing when transacting in shares. The real value add is knowing which insiders you should follow and those you shouldn’t.
But how do you quickly formulate such a view from a simple insider trade news headline ? Is it enough to simply look at the position of the insider, trade direction and transaction size to predict what effect this will have on the equity price ?
We’d argue no…..and that’s why our unique Insider transaction analysis uses methods that eliminate noisy trades and can spot a “prescient” insider by focusing on trades that are both followed by price changes and are also well-timed.
By providing real-time insider transaction alerts and presenting individual success ranking scores we give you the ability to immediately establish what effect they have historically had on the stocks you care in.
Consider the following observations for the Chief Financial Officers of two large cap US stocks…you know…the guys who manage the financial risks of the company ! You would assume that being privy to the company accounts any discretionary transaction would be jumped on by the market and an immediate directional inference made, but we prove here that that is not always the case and should be considered on a individual basis as the results can prove vastly different.
Martin Ellen, CFO of Dr Pepper Snapple recently sold $1.45m worth of stock which follows a number of other sales over the last 5 years. We award him a 1 Star Ranking. As the chart suggests, the resultant price performance(post transaction) over the short and medium term coupled with his timing attribution suggests he offers little in the way of negative signalling risk for the stock.
Compare him to fellow CFO, Michael Hartshorn at Ross Stores. He is awarded a 3 Star Ranking and sold $820k worth of stock last week. Supporting evidence from the accompanying chart suggests that both directionally and timing-wise Mr Hartshorn’s transactions posses equity moving information. His recent sale should therefore not be dismissed.
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