INSIDER TRADING TRANSACTIONS

Examining the insider trading transactions of a company can give you some insight into a companies future. If the insiders believe a stock will rise, that is a very strong indicator. Adversely, if all the head honchos are selling in large quantities that is an ominous sign for a stock. One thing to keep in mind about insider selling is just because a CEO sells some stock does not necessarily have bad implications. He or she just may need some money or be looking to diversify.

In general it is a good idea to own stocks where the company insiders have a vested stake in the well being of the company. With all the the talk lately of corporate overpay, one must keep in mind that having a CEO with a self interest in the company is a good thing also.

I believe one of the strongest indicator of a stocks future is when an insider makes a stock purchase transaction. There are services available on the internet which will send you weekly updates about SEC filings made by insiders regarding their trading transactions. For the beginning trader they may be too expensive, but for the experienced trader they can provide valuable information!

Insider trading transactions can be a very valuable and profitable way to make steady profits.

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