- Corporate executives are buying stock in their own companies at the highest pace since March 2020.
- Experts say the uptick in insider stock purchases could be a sign that the market sell-off has hit a bottom.
- Howard Schultz, who recently returned to Starbucks as CEO, bought $15 million shares.
Corporate executives are purchasing stock in their own companies at the highest pace since the start of the pandemic.
Insider stock purchases among S&P 500 companies from May 1 to May 24 was the strongest since March 2020, according to the Financial Times, which cited VerityData. And for companies in the Russell 2000 index, insider buying outpaced selling in May for the first time since March 2020.
Howard Schultz, who recently returned to Starbucks as CEO, bought $15 million shares, according to the FT. Similarly, RingCentral co-founder and Chief Executive Vladimir Shmunis snagged $1.2 million worth of shares in the telecommunications company.
David Giroux, portfolio manager at T Rowe Price, told the FT that strong insider buying historically been a good sign the market has hit a bottom.
Markets have been turbulent as bearish sentiment grows amid 40-year high inflation, tighter monetary policy from the US Federal Reserve, and fears of a recession.
As a result, traders are looking for signs that the market has finally hit bottom, clearing the way to start making bullish bets on stocks again.