Watch Job-Search Selling for Buys

This column was originally published on RealMoney on Nov. 18 at 12:44 p.m. EST. It's being republished as a bonus for TheStreet.com readers.

Investors love to see insider buying in the stocks of companies they own and abhor insider selling. But it turns out that selling in one group of stocks -- the job search and recruitment companies -- may actually serve in a perverse way as a positive signal, according to the results of new research from Thomson Financial.

The Thomson study uncovered an intriguing link between labor market trends and insider selling at job search companies like Robert Half International(RHI Quote) and Administaff(ASF Quote). Whenever selling at these kinds of companies hits extreme highs, overall U.S. job growth increases on average, over the next year or more.

The study, called "Insiders Foresee Changes in Unemployment Rate," found that when selling increases enough, unemployment falls over the next 12 to 24 months by anywhere from 3.2% to 5.7%. ...