Insiders are buying energy stocks hand over fist

I am not the only one who is bullish on the energy sector in the mid-to long-term as insiders and energy company CEO´s have been buying stocks in their respective companies hand over fist the last couple of quarters. According to Gurufocus the XLE (US Energy Select Sector index) insider Buy/ Sell ratios were 7.73x, 4.25x and 2.06x for Q3-15, Q4-15 and January 2016 respectively. Energy company CEO´s were even more bullish, boosting insider Buy/ Sell ratios equalling 13.82x, 9.13x and 1.67x for Q3-15, Q4-15 and January 2016 respectively. As Graph #1 below illustrates the energy insiders have been good at timing the market in the past as they purchased a lot of shares at the trough of the financial crisis and during the 2011 - 2012 slump. Post spikes in the XLE index insider Buy/ Sell ratios the XLE index have tended to appreciate significantly.

A company insider is defined as a senior officer or director of a publicly traded company, as well as any person or entity that owns 10 % or more of a company´s voting rights. A Buy/ Sell ratio above 1x indicates that insiders are buying more shares than what they are selling in their respective companies. 

Graph 1: Insider Buy/ Sell ratios and XLE index development

                               Source: Gurufocus

Graph 2: CEO Buy/ Sell ratios and XLE index development

                               Source: Gurufocus

Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving any compensation for it.