Insiders again withdraw over 100 million in capital

2010 was a conciliatory year for the stock market. The DAX has so far been able to maintain the 7,000 mark and even set a new high in December. At the moment, people everywhere are making lively guesses as to how much higher we will be at the end of 2011. However, we are not immune to setbacks in 2011 either. The insiders provide a first negative indication right at the beginning.

The December data

In the monthly Insider Analysis we evaluate the data of all recorded insider transactions of the Insider Alerts out. In the month of December, a total of 59 transactions were counted, of which 27 were on the buyer side and 32 on the sales side. Quantitatively, the sales thus slightly predominate with a share of 54.2 percent.

The volume figures are more interesting. Insiders bought shares for over 50 million euros, the highest figure since May. However, on the sell side, there were sales of over 150 million euros. This results in a net capital outflow of over 100 million euros. This is an immensely high sum compared with the previous months. Overall, sales thus strongly outweighed cash outflows.

Causes of insider behavior

So if you are wondering where these figures come from, the long-lasting trend and the high level on the stock market is certainly the first reason. Many insiders have accumulated large profits over the year and have now taken these as a precautionary measure at the end of the year. You have to consider that the current movement in the DAX already extends over more than 1,000 points without a market correction having taken place.

In addition, the largest volumes were clearly found before the holidays. It is not unusual, Take profits, if you do not have an eye on the market for some time. Also the insiders have finally wanted to enjoy the free days. Certainly, one or the other also wanted to prevent an expected January correction. In each of the last three years 2008, 2009 and 2010 was first sold strongly at the beginning of the year.

The air is getting thinner

You must always remember that corporate insiders have a long-term investment horizon and are very strategic and risk averse. An insider purchase or sale is usually based on a wealth of distinctive information. After all, it is precisely this circumstance that makes insider transactions so valuable to us.

It is not the case that insiders left the market in panic in December, the buy side is far too strong in terms of volume for that. The market environment in December simply tended to favor selling. Trading volumes were thin - and the DAX was not able to move far away from the 7,000 points. You can describe insider behavior with the words precautionary and cautious. Quite fitting!

Conclusion

The German economy is in a good position at the start of the new year, and many shares are also still generally favorably valued, because the profits of the companies are unquestionably there. However, insiders took precautionary profits in December, which fits with the high level of the DAX. We will probably only see major buying with the next correction - and insiders seem to be waiting for this at the moment.