At BNE, the answer was yes. In contrast, insider buying continued in bank stocks such as PNC Financial, BankAmerica and Security Pacific. Insiders were signaling that nothing internal had triggered the lower prices. In buying more shares, they were also confirming that the stocks represented good value at the lower prices. PNC, BankAmerica and Security Pacific all experienced significant rallies late in the year, when the general selling pressure on the banking issues abated.
Insider buying and selling is a relative concept.
Relative, that is, to where the stock is trading, based on its historic valuation. For instance, if selling occurs near yearly lows, where we would normally expect to see insider buying, we become concerned. This type of activity is frequently a harbinger of newer lows to come. Buying near highs, at prices where one would normally expect profit-taking, in contrast, can be extremely bullish. But beware if you discover a company whose insiders persistently sell as their stocks rise.