When key decision-makers within a company - including executives, directors, and major shareholders - engage in stock purchases, it's known as insider buying. The market tends to interpret insider buying as a bullish signal for the stock's future performance, since these insiders are generally presumed to have a deeper understanding of the company's internal workings and strategic plans than the average investor.
Investors seeking to take their cues from insider activity can access relevant data through publicly available Form 4 filings. While insider sales of company stock are also matters of public record, these transactions tend to have a less straightforward sentiment read than stock purchases - which are generally made because the insider thinks the share price will rise.
