Are Insider Trades Informative?

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ID: 295338
2001
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Abstract
We examine insider trading activities of all companies traded on the NYSE, AMEX, and Nasdaq during the 1975–1995 period. In general, very little market movement is observed when insiders trade and when they report their trades to the SEC. Insiders in aggregate are contrarian investors. However, they predict market movements better than simple contrarian strategies. Insiders also seem to be able to predict cross-sectional stock returns. The result, however, is driven by insider's ability to predict returns in smaller firms. In addition, informativeness of insiders' activities is coming from purchases, while insider selling appears to have no predictive ability.
Reference Key
openalex_W3123062772 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Josef Lakonishok, Inmoo Lee
Journal review of financial studies
Year 2001
DOI
10.1093/rfs/14.1.79
URL
https://doi.org/10.1093/rfs/14.1.79
Keywords Keywords not found

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