The following is an excerpt from a piece first published on Money & Markets.
I’m the first to admit I don’t know what happens next to stock prices. You could make a credible case that, while the economy might be in for its worst recession since the 1930’s Great Depression, the S&P 500 could hit new all-time highs by year’s end due to the flood of Fed stimulus coming down the pipe. That’s not a crazy statement.
But you could also credibly argue that the market should take another major leg down, as buybacks will be off limits for large swaths of the market for the foreseeable future and earnings promise to be awful.
Rather than try to guess — and let’s face it, it’s a guess — let’s instead take a look at what the insiders actually running America’s largest companies are doing.
Company executives and board directors aren’t geniuses. They’re regular people like you and me. They do, however, generally have a pretty good grasp of when their company shares are undervalued. While not necessarily market timers, they tend to be pretty good value investors. And to say they saw value in March would be an understatement.
To continue reading, see Ignore the Noise and Follow the Insiders — This Is What Sector They’re Buying.