Bearish Sector Divergence
Companies where insiders and institutions are selling while the majority of sector peers are buying — a warning signal suggesting company-specific deterioration against a positive sector backdrop.
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Why This Matters
When an entire sector is experiencing institutional inflows but a specific company sees insiders and institutions simultaneously reducing exposure, it isolates company-specific risk from sector-level dynamics. The contrast with peer buying makes the selling more informative — these investors are not exiting due to macro concerns but due to company-specific views. This signal helps distinguish idiosyncratic risk from sector risk.
0 Companies with Sector Laggard Signals
Insider data from Form 4 filings (typically filed within 2 business days of transaction). Institutional data from 13F filings (reported quarterly, up to 45 days after quarter end). Fundamentals from 10-K/10-Q filings (quarterly). Signals are recalculated as new filings become available.
No companies currently match this signal type. Signals are recalculated regularly as new SEC filings become available.
What Is a Bearish Sector Divergence Signal?
A bearish sector divergence signal identifies companies where corporate insiders are selling shares and institutional investors are net sellers, while the majority of companies in the same industry sector are experiencing net institutional buying. This pattern suggests that company-specific factors — rather than sector-wide dynamics — are driving the selling. When sector peers benefit from positive industry tailwinds but a specific company sees coordinated insider and institutional exit, it may indicate company-specific challenges not yet visible in public disclosures.
Insider trading data from SEC EDGAR Form 4 filings. Institutional holdings from quarterly 13F filings. Financial fundamentals from 10-K and 10-Q filings. All data is public domain and does not constitute investment advice.
Other Signal Types
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Frequently Asked Questions
What are smart money signals?
Smart money signals are cross-referencing indicators that combine multiple SEC filing data sources — insider trading (Form 4), institutional holdings (13F), and financial fundamentals (10-K/10-Q) — to identify stocks where well-informed investors are acting with conviction. When insiders, institutions, and financial metrics all point in the same direction, it may indicate meaningful information about a company's prospects.
How are smart money signals calculated?
Signals are computed by combining three independent data sources from SEC EDGAR: (1) insider buying/selling from Form 4 filings (last 30 days), (2) institutional ownership changes from 13F filings (quarterly), and (3) fundamental metrics from 10-K/10-Q filings (revenue growth, profit margins). Each signal type has a score from 0-100 based on the strength and alignment of these factors.
How often are smart money signals updated?
The underlying data updates at different frequencies: insider trading data (Form 4) is typically filed within 2 business days of a transaction, institutional holdings (13F) are filed quarterly within 45 days of quarter end, and financial fundamentals update with each quarterly earnings filing. Signal calculations run regularly to incorporate the latest available data.
What does a convergence signal mean?
A convergence signal indicates that corporate insiders are buying shares, institutional investors are increasing their positions, and the company's financial fundamentals are improving — all at the same time. This triple-positive alignment from three independent sources suggests broad agreement among well-informed parties that the stock offers value.
Should I buy stocks based on smart money signals?
No. Smart money signals are informational tools, not investment recommendations. While they highlight interesting patterns in SEC filing data, they should be one of many inputs in your research process. Insider selling can have innocent explanations, institutional moves may lag reality by 45+ days, and past patterns do not predict future returns. Always do your own research before making investment decisions.