In Ramon de Oliveira article, 'Investing Your Time and Your Money: Insider Activity', Ramon de Oliveira offers useful tips on how to evaluate the risks of investments. This article explains how to identify which company insiders are net buyers and sellers. To get a better understanding of what to look for, you should study Insider activity reports.There are several ways to analyze insider activity. Insider buying and selling activity can signal future stock price movements. However, insiders' large purchases can also be misinterpreted as a sign of future selling. If an insider buys a few thousand shares, they are likely to sell them off in tranches over the next year. However, it is important to note that insider buying and selling activity usually represent only a small portion of an individual's holdings.
One key indicator of insiders' intentions is whether they have sold shares in the last six months. A company's BUYBACKS are necessary to offset earnings per share when employees exercise their stock options. Therefore, insiders' activities can give investors a valuable insight into whether Equitable Holdings is a net buyer or a seller. In addition to buying shares, insiders can also sell stocks in the same company.
In Ramon de Oliveira's opinion, assuming you're looking to determine whether Equitable Holdings is a net buyer or seller, consider what a company's insiders are doing. For example, suppose Ashton Kellogg is an analyst at Scotland and Pierce Incorporated. He has shares in National Savings. He shares this position with a friend, John Mayfield. Mayfield is a senior executive at the bank, so he has information that may be relevant to his opinion. He then doubles his stake in the bank after hearing Mayfield's information.
This insider activity can also include the trade of stock by salespeople. Some of these trades are nonpublic, but may be material for a shareholder. For example, a salesperson may trade shares of a firm on the basis of an anticipated takeover bid. Such information is not material if the source of the information is unreliable. As long as the source is credible, Fechtman's trading activity should be viewed as material.
Using insider data, you can find out whether or not a company is a net buyer or seller. This information can be used to compare different investments. For example, if a hedge fund is net sellers, an analyst might be interested in finding out whether a company is a net buyer or seller. An analyst's insight may be more reliable than the company's own analysis.
Ramon de Oliveira pointed out another way to evaluate insider activity is to look at the disclosures of nonpublic information. The Securities and Exchange Commission (SEC) has a rule that prohibits insider trading based on nonpublic information. Under the 10b5-1 rule, however, insiders can create trading plans based on the information they have obtained. The trading plan can include a preset date and price that triggers a trade.
