Going Against the Experts: Wall Street Analysts vs. Company Insiders

This day and age, it sometimes sees like everyone's an expert, and there's an expert for everything. With so many opinions floating around, it's nearly impossible to tune them out -- and according to economist Noreena Hertz, all this white noise is more than just a nuisance.

At this year's TED conference, Hertz argued that we, as a society, have become seriously addicted to experts. And when we start taking their word as gospel, we stop thinking for ourselves. 

That's not just a platitude, either -- scientific studies have actually shown that the decision-making part of subjects' brains quite literally turn off when they listen to experts' voices.  What's more, they blindly took whatever advice doled out to them -- whether or not it was right or wrong.

Ceding the power of independent thought to the so-called experts has historically led to calamitous results. And we don't need to look far back in time for evidence, says Hertz -- just look at the economic crisis we're still digging ourselves out of.

She puts much of the onus on financial experts, "getting it so wrong that we're living through the worst recession since the 1930s." But at the end of the day, we have no one to blame but ourselves if we're too lazy to draw our own conclusions.

Which is why it's important to take what Wall Street analysts say with a grain of salt. Sure, they may be the "experts" on the stocks they follow -- but that doesn't mean they can't be wrong from time to time.

While we're on this topic, we created a universe of stocks that have seen worsening analyst sentiment over the last three months, according to the ratings collected by Reuters. These ratings are presented on a linear scale, where 1 = "Strong Buy" and 5 = "Strong Sell."

All of the companies mentioned below have seen their ratings move closer to five over the last three months, i.e., worsening analyst sentiment.

We then collected data on insider buying, and narrowed down the list to only focus on those companies that have seen insider buying over the last six months -- suggesting that company insiders don't agree with deteriorating analyst opinion. Considering that insiders know their companies best, would you agree with them, or the Wall Street analysts? (Click here for free, interactive tools to analyze these ideas.)

Insider trading data sourced from Yahoo! Finance; analyst ratings sourced from Reuters. The list has been sorted by the change in insider ownership over the last six months.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.