Insider Stock Transactions Signal Caution on Tech Valuations
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Insider selling is rampant, especially in tech stocks, signaling caution about the market's valuation and future growth prospects.
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Defensive sectors like healthcare and communications services are seeing the most insider buying, while cyclicals like consumer discretionary and materials are seeing heavy selling.
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Outside of Meta and Nvidia, the "Magnificent Seven" mega cap tech names have seen little insider selling recently.
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Some tech valuations still seem reasonable given their strong growth, but names like Meta, Atlassian, Salesforce, Cloudflare and Arista Networks look relatively expensive.
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Favored stocks seeing insider buying include Texas Pacific Land, Madrigal Pharmaceuticals, Howard Hughes Holdings, Asana, BlackRock Innovation & Growth Trust and Staar Surgical.