Dozens of academic studies and more than two decades of personal experience have demonstrated that there is no better “heads-up” in the stock market than top executives and directors piling into their own company’s stock with their own money at current market prices. As buy signals go, it just doesn’t get much better than this. Why? Because corporate insiders have access to all sorts of material, nonpublic information that is not available to the rest of us, including the direction of sales since the last quarterly report, the addition of major new clients or customers, new products and services in development, the likely resolution of pending litigation, and so on. That’s why the SEC requires insiders to file a Form 4 within 48 hours of each purchase, detailing how many shares they bought, at what price and on what date. Over the years, however, I’ve learned that some insiders are much more astute than others. And the single-most knowledgeable one in the nation, in my view, is shareholder activist Carl Icahn.
Posted on: Mon, 30 Sep 2013 16:12:00 +0000
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