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Pro Analysis

Corporate insider selling surges as market hits record

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Corporate insiders are taking profits as U.S. equities rise to record levels, according to the new Vickers Weekly Insider Report from Argus Research.

Based on data that examines the ratio between buying and selling among corporate executives, the rate of net insider selling reached the highest level since June 2015. That surge preceded a previous market high when the Dow was pushing over 18,000 for the first time ever, according to Richard Cuneo, senior vice president of operations at Argus Research.

Investors often monitor corporate insider selling and buying as a way to gauge the true outlook for a business, because it gives the intentions of executives who run operations on a day-to-day basis.

Although the reasons for selling stocks can vary, any cluster selling by a group of executives is often perceived as a red flag.