There is one nuance attached to how investors look at inside buying and selling in the stock market, as this gauge is typically limited to institutions and other big household investment names. However helpful keeping track of this may be, there is a deeper layer that investors can look into to understand what’s going on behind an individual company and its future valuation.
This gauge has to do with insider buying, which institutions, big-known investment houses, or wealthy individuals do not do. This one comes in the form of corporations buying back their stock, which carries a net benefit over the other common method used to reward shareholders: paying out dividends. Contrary to dividends, stock buybacks keep working capital within the company in question, as well as eliminate the additional layer of taxes that dividends carry.
