Call it a cheery note in a mediocre and jittery market.

Just-released figures show that corporate insiders, who’ve been on a selling binge the past couple of years, are getting a bit more buoyant about stocks.

The latest numbers tell the story. According to the trackers of insider buying and selling trends at Thomson Financial, insiders snapped up $171 million worth of their own companies’ shares last month, a hefty 76% increase over July’s purchases of $97 million. The August purchases represent the highest amount of monthly insider buying in two years. Not only that, the amount of August buying – which showed substantial increases by both companies and executives – topped the historic five-year monthly purchasing average of $160 million.

It’s too early, of course, to do handstands because one month certainly doesn’t make a trend. Still, it’s encouraging, said one Thomson official, to see insiders, who are really the smart money, show market confidence at a time when everyone is so worried.

Interestingly, the stepped-up insider purchases contrast sharply with the mood of the public (whose mutual fund cash inflows have slowed to a crawl) and that of many professional investors (who are fattening their cash reserves).

While it’s difficult to say who’s right, it’s worth noting that the actions of the public and the pros are often solid contrary indicators. In contrast, insiders, when they buy or sell en masse (versus their buying or selling of an individual stock),are usually right about 80% of the time in forecasting the market’s future direction.

So what do insiders think they know that the rest of us don’t? One General Electric official believes the stepped-up insider buying reflects an overall corporate perception that the economy, contrary to a good deal of management caution about near term prospects, is clear ly on a roll and that improving bottom lines will show it.

Significantly, executives of large cap companies (market capitalization of $5 billion or higher) participated more strongly in August’s buying binge than in any other month in the past year. All told, such buying represented 15% of the month’s overall purchases, compared to 5% and 6%, respectively, in June and July. Among the active participants were such large cap firms as Wells Fargo, Sun Microsystems, and Tenet Healthcare.

In terms of individual sectors, insiders of finance and technology companies went on the most conspicuous buying tears. August finance company purchases, for example, more than doubled from July to $52 billion, while technology purchasing reached $36 billion, its highest monthly volume in two years and a 125% jump from the prior month’s activity.

Here’s a rundown of some of the more compelling examples of last month’s insider buying:

• Earthlink: One director purchased 120,000 shares, the first such buy here in two years.


• Marvel Enterprises: Two insiders made their first insider buys (a total of 32,500 shares) since 2000.


• Tenet Healthcare: Two executives bought a total of 38,300 shares, the first buying since March.


• Wells Fargo: One officer acquired 30,000 shares, the first notable buy since September.


• Activision: Two insiders bought a total of 16,000 shares, making the third quarter the strongest quarterly buying in two years.


• Invitrogen Corp.: Three insiders bought a total of 18,000 shares, the largest consensus to date.


• M &T Bank Corp.: A director added 4,000 shares, his first buying in over two years.

Meanwhile, a number of corporate insiders don’t share the enthusiasm of their bullish counterparts. Indicative of this, insiders sold $3 billion worth of stock last month, a 71% increase from July’s $1.8 billion of sales.

Normally, insiders, reflecting the widespread issuance of options, sell about $20 worth of stock for each dollar’s worth they buy. Historically, ratios above 20 to one represent bearish sentiment and ratios below 12 to one are indicative of bullish sentiment. The latest monthly ratio is neutral – $17.13 to $1, a slight decline from July’s $18.11 to $1.

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Brokerage for sale? A.G. Edwards ($35.55) says it isn’t so, but Wall Street rumblings have it that the brokerage firm, one of the nation’s oldest and largest, has put itself on the selling block and may, in fact, have been approached on a possible sale. In response, Margaret Welch, its public relations director, said it’s the brokerage’s goal to continue to remain independent. Asked whether there had been any buyout overtures, Ms. Welch declined to respond. Headquartered in St. Louis, A.G. Edwards, a 117-year-old firm, operates 700 branch offices throughout the U.S. Based on a market capitalization of 79.2 million shares, an acquisition of the firm at its current price would run about $2.8 billion.