Insider Trading Behavior Following Analyst Earnings Forecast Revisions

Abstract

In this paper, I study insider trading behavior following analyst earnings forecast revisions. Contrary to the notion that insiders trade consistent with analyst earnings forecast revisions in order to take advantage of the post forecast revision drift, I find that insiders react opposite to analyst earnings forecast revisions and are more likely to sell stock after upwards earnings forecasts revisions and are more likely to purchase stock after downwards earnings forecast revisions. My findings are consistent with insiders trading opportunistically following analyst earnings forecasts revisions.