These insiders like their businesses so much, they buy the companies (or at least some shares).
Many potential investors look to insider buying as a signal that things are going well for a company, because presumably, these insiders have information the guy on the street (even on Wall Street) might not have. This kind of insider buying is legal, and is not the type of scenario Martha Stewart went to jail for. Business insiders often buy shares of their companies when they feel Wall Street has not valued the company adequately, so insider buying is also a sign that a company may be undervalued. Here are some recent high-profile cases of insider buying:
1. Adam Portnoy, Director of Government Properties, bought 360, 000 shares on July 29th. However, the stock dropped -0.60% after the purchase. Currently, analyst have 3 Hold ratings on the stock, 1 Sell and 3 rate it as Underperform. Could Adam Portnoy know something the street doesn’t know about the company?
2. CEO of Air Products Partners, Seifi Ghasemi, purchased 25, 000 shares on August 1st at $132.84 per share. The stock rose 0.8% after Ghasemi bought shares.
3. The embattled stocks Herbalife still has its believers, including CFO John Desimone, who bought 10, 000 shares on July 31st at $55.56.The stock rose 0.32% after his purchases of the shares.