February 27, 2014
– Comments (4)
Am I correct to believe it is a great sign when a CEO consistently purchases stocks of its company over a 1 year period totaling 20 million shares?
Generally, that is correct. They should know more about how the company is doing than outsiders.
Just make sure he/she is buying and is not just exercising very low priced option awards.
That could still be positive, but is much less risky for them than for investors buying at market.
JMO and worth exactly what I am charging for it.
Are we talkin about Opko Health (OPK) here?
I got in on the recent battering it took down to the low 8's, and I'm happy so far!
As teacherman1 notes the majority of shares an insider gets is indirect. If they are buying that many open market they have to file an S1 to signal it. (See the companies SEC filings on Edgar).
Another quesition I like to ask is how heavy are institutions following it. This gives it more analyst coverage and validity.
Insider purchase + High institutional holdings = Generally good news.
Another reason for an insider to buy 20M would be if he wants to take it private, still good for regular investors.
NOTE: When a company goes public, the IPO shares are printed, this sometimes looks bullish, but it's IPO initialization. If the company is an IPO you need to look at post-IPO transactions.
Thanks for the replies guys, And yes I was speaking of OPK! Great pick. Note that there are MANY technical indicators giving a thumbs up to OPK, including the 20% shares shorted. I think Friday may have seen a minor short squeeze early morning. I think OPK is a good choice both short and long term. Cheers!!!