Interpreting insider buys and sells

Article Excerpt

Insider buying and selling on public information is one of many factors worth considering when evaluating a dividend stock. But it’s a mistake to put too much weight on it—or any one or two investment indicators, or types of investment information. In general, though, insiders only make substantial buys for one reason: they think the company has attractive investment appeal. Remember, however, that insiders can delude themselves about their employer just as easily as outsiders. On the other hand, insiders may sell for a variety of personal reasons that have nothing to do with the company or their perception of its outlook. So, all in all, insider buying is a more powerful indicator than insider selling. selling…