Insider transactions
Company officers buying or selling their own shares, disclosed by law.
Legal insider trading is disclosed: directors must report their transactions. Illegal insider trading is dealing on material non-public information, which is a criminal offence.
The asymmetry is useful. Insiders sell for many reasons (tax, a house, diversification), so selling tells you little. Insiders buy for essentially one reason, which is why cluster buying by several officers is a genuinely informative signal.
One investment is the fund
Most go to zero and that is not a failure of selection, it is the shape of the asset class. It is why a venture investor has no use for a company that will merely do quite well.
It is one of the few signals where the people acting have more information than you and must tell you they did it.
Reading too much into a single insider sale. Read a lot into several insiders buying at once.
Related terms
See Insider transactions on a real company
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