Buying of TSX-listed stocks by insiders is about equal to selling activity right now, pointing to mixed feelings about the market among even corporate executives and directors.
INK Research, which monitors the buying and selling of stocks by corporate leaders in their own businesses (known as insiders), said this week that its latest sentiment indicator is at 98.8 per cent for the TSX (not including the Venture exchange), largely unchanged from earlier in the month. The figure suggests there is just slightly more selling than buying.
The indicator is derived by taking the number of stocks with buy-only transactions over the last 60 days, and dividing that with the number of sell-only transactions. The indicator ignores stocks that have both buying and selling in an effort to give a more accurate reading. A reading of 100 per cent means there has been an equal number of companies with key insider buying and key insider selling over the past 60 days.
"At this point, insiders are not adding across the board to their positions" as stocks fell last week, said INK Research CEO Ted Dixon. "Instead, they are picking up selected stocks that have succumbed to recent market jitters or taking profits in some that have had good runs."
"Right now, insiders appear to be in wait-and-see mode as we head for a very important week in early November with U.S. elections and the China leadership change," he added. "Going forward, we are watching how insiders would react to either a sustained rise or fall in share prices."
Corporate insider activity is interesting to monitor, given that the group has a history of being more right than wrong about the market's direction.
But this raises the question: what are the Canadian-listed stocks with the most insider activity? Here are the top 5 stocks with the most net buying and the top 5 with the most net selling over the past 60 days, according to INK Research. There are two lists for each, one by dollar value, and the other by share volume.
You'll notice the stock with the most net buying, by value, is forest products company Canfor Corp. The overwhelming majority of that is from British Columbia's richest man, Jim Pattison, a long-time board member of Canfor and the largest shareholder of the company, notes Mr. Dixon.
It's also interesting to point out that Potash Corp. tops the list for the most net insider selling by value. As we pointed out earlier today in Market Blog, CIBC significantly slashed its price targets on the company today, concerned that potash supplies will be running ahead of demand for some time to come.
Top 5 companies with net buying (by value. Figures in Canadian dollars)
1. Canfor, $21,227,381
2. Mega Brands, $3,655,998
3. Cequence Energy, $1,992,719
4. Element Financial, $1,704,727
5. Le Chateau, $1,670,050
Top 5 companies with net selling (by value. Figures in Canadian dollars)
1. Potash Corp. of Saskatchewan, -$67,878,199
2. Franco-Nevada, -$48,134,264
3. CGI Group, -$35,745,360
4. Allied Nevada Gold, -$34,979,798
5. Power Financial, -$26,802,498
Top 5 companies with net buying (by volume. Figures represent net shares)
1. Rusoro Mining, 19,090,000
2. Zincore Metals, 7,562,687
3. ArPetrol, 6,251,000
4. Sea Dragon Energy, 3,033,000
5. Metalcorp, 2,616,000
Top 5 companies with net selling (by volume. Figures represent net shares)
1. Las Vegas From Home.com, -8,000,000
2. Woulfe Mining, -7,000,000
3. Petrowest, -3,978,000
4. Intertainment Media, -2,631,000
5. Osisko Mining, -2,188,200