Investors can track insider buying activity to gauge whether company leadership likes the prospects for their own stock at current prices. “Insider buying” refers to purchases of company shares by executives, board members, and major shareholders (owning 10% or more) – in other words, individuals with deep knowledge of the company's operations. These informed bets on the company's future are generally seen as a bullish sign, suggesting these insiders believe the share price will rise.
Considering this, it's worth pointing out that the CEO of one small-cap company recently invested over $5 million in his own stock. Here's a closer look at the heavy insider buying activity on this Russell 2000 Index (RUT) component, and what the rest of Wall Street expects for the shares.
