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Mark Hulbert: The bear market may not be over but some corporate insiders are acting like it is


It’s premature to declare the bear market is over, but it’s not too early to start constructing your buy list of stocks for when conditions are more favorable.

That’s the conclusion I draw from an analysis of recent insider transactions from Nejat Seyhun, a finance professor at the University of Michigan and one of academia’s leading experts on the behavior of corporate insiders. The last time I checked in with him, in early May, I reported that insiders were aggressively bearish, “likely portend[ing] additional price declines.”

I reached out to Seyhun this week for an update, given that the S&P 500

is now about 12% lower than where it stood when that early-May column was published, while the Nasdaq Composite

is almost 13% down. As he has done every time I have interviewed him over the years, Seyhun referred me to an insider sentiment index that he calculates. This index tracks the monthly percentage of publicly traded companies that experience net insider-buying from corporate officers and directors.

Note carefully that this index does not reflect transactions made by the third category of investors that are legally considered insiders: a corporation’s largest shareholders, those owning at least 10% of outstanding shares. Seyhun doesn’t include them in his analysis because he has found from his research that, on balance, they do not have any privileged insight into where a company’s stock is headed.

The chart above plots the three-month moving average of Seyhun’s index, and as you can see it has declined over each of the last three months. Ominously, it is significantly lower than where it stood in June, even though the overall market is trading in the vicinity of where it was at its June lows.

(When I reported on Seyhun’s index in previous columns, I received numerous inquiries about how the public can access the data. Seyhun’s son, Jon Seyhun, has created a paid subscription website,, that provides daily updated values of the index. I receive no compensation from this site.)

Green shoots

Given these discouraging trends in overall insider sentiment, it might seem like overreaching to find anything positive to say. But in the interview Seyhun pointed out that several individual sectors are experiencing net insider buying — what he referred to as “green shoots.” Those sectors with the most positive insider signals currently include Information Technology, Industrials, Financials, Real Estate, Communication Services and Consumer Discretionary.

Seyhun notes that these sectors are particularly sensitive to the trend of interest rates. So insider confidence in these cases has significance above and beyond just the companies in the sector, but also for the likely course of interest rates. His interpretation is that “insiders take the [Federal Reserve’s] current forward guidance and path of future interest rates (peaking around 4.75% in the middle of 2023 and coming down to 4.5% by the end of 2023) to be fairly sufficient to control inflation and bring the economy back in balance. Hence, insiders feel we are not likely to get additional surprises on the interest rate area from the Fed.”

The following table contains two companies from each of these interest-rate sensitive sectors that have experienced heavy net insider buying over the past three months.




Communication Services

Globalstar. Inc. (GSAT)

Communication Services

Luminar Technologies. Inc./DE (LAZR)

Consumer Discretionary

VOXX International Corp (VOXX)

Consumer Discretionary

B. Riley Financial. Inc. (RILY)


Rocket Companies. Inc. (RKT)


APi Group Corp (APG)


Applied Blockchain. Inc. (APLD)


Bridgeline Digital. Inc. (BLIN)

Information Technology

CalAmp Corp. (CAMP)

Information Technology

American Assets Trust. Inc. (AAT)

Real Estate

BRT Apartments Corp. (BRT)

Real Estate

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

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