Executive Stock Sales Can Speak Volumes

Executive stock sales can tell you a lot about the future potential of a company. If you are an investor in a company in which an executive has recently sold their stock, you need to take a good look at the company itself. When an executive sells their shares of stock in the company, you need to try to determine the reasoning behind it. Sometimes, they will issue some type of statement as to why they are doing so. In some cases, they may simply be generating cash for something that they need. This is common when an executive is getting ready to retire.

Stock Sales that Signal Trouble

In other cases, the executive might be selling their stock because they believe that the stock is about to decrease in value. In many cases, the executive could be found guilty of insider trading. Therefore, when they sell their stock, they have to do so in a public fashion and notify the SEC.

As an investor, you should take some time to think about whether you should follow suit when an executive sells stock. In many cases, it is a good indicator that you should get out while the stock still has some value.

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