Macro Insider Focus

First Call/Thomson Financial Insiders' Chronicle, August 27, 2001

Market wide, insiders and other early investors registered $5.2 billion worth of restricted stock for sale in July. The fact that this total was down slightly from June levels is indeed a welcome development, as itre-establishes a gradual trend away from the historic levels witnessed in February/March 2000.

Unfortunately, the July figures offer precious little improvement in the much-followed insider sell/buy ratio, which at 2.2 sellers to every buyer, remains well above its historical mean. Again, the real driver of this ratio has not been an inordinate level of insider selling, but rather downright anemic levels of insider buying.

The decrease in selling pressure is encouraging, especially from a liquidity perspective, but until this ratio improves, it will be difficult to characterize corporate executives as anything but cautious on business conditions going forward.

(*)Note: While the general trends are the same, the absolute values in the chart above are slightly different from those that appeared previously in the Insiders Chronicle. Over the past year, we have revisited the methodology used to calculate the ratio and have arrived at what we consider to be the most accurate representation. Using this method, the historical mean ratio is just under 1.5 sellers to every buyer. This chart will he updated periodically in the Macro-Insider Focus.

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