What the Dichotomy Between Corporate Shares Buy-Backs and Insider Buying Is Telling Us

TrimTabs has an interesting analysis of the dichotomy between insider buying and corporate shares buy-backs:

Corporate executives of U.S. companies doing share buybacks aren’t putting much of their own money into the repurchases so far this year, indicating the insiders lack confidence that their company stock price will rise, according to a new study from the financial research firm TrimTabs.

TrimTabs said U.S. companies have bought back $264 billion in shares so far this year, with just $3.3 billion, or about 1.3 percent, coming from insiders. It was the highest ratio of announced buybacks to insider purchases since TrimTabs began tracking buyback data in 2004, the research firm said.

“We’ve never seen such a sharp contrast between what insiders are doing with their own money and what they’re doing with the money of the companies they manage,” TrimTabs Chief Executive Officer Charles Biderman said in a press release. “The best-informed market participants seem worried about what will happen to the economy when the Fed stops printing money.”
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“The ratio of announced stock buybacks to insider buying reached 80 in the first two quarters of this year,” Biderman said. “They were by far the highest levels in our records. How many of the analysts and journalists cheering the big buybacks realize that the people rolling them out aren’t buying anything themselves?”