11. Insider Trading - The NASDAQ Dozen

Insider Trading, the next metric in your stock analysis, is located on the Insider Form 4 page. To access it, click on the Insider Form 4 link under the Holdings heading in the left menu (see Figure 18).

Insider Form 4 Link
Figure 18—Insider Form 4 Link
Why We Look at Insider Trading

Insider trading can give you a glimpse into how confident the managers of the company are in the prospects for the company. If managers are confident in the company, chances are good that they will be buying stock in the company. Anytime you see insiders buying stock, it is typically a good sign.

How to Score Insider Trading
  • Pass—Give Insider Trading a passing score if the net activity for the past 3 months has been positive.
  • Fail—Give Insider Trading a failing score if the net activity for the past 3 months has been negative.

Looking at Insider Trading for WMT in Figure 19, WMT should receive a failing score. You can see that net activity for the past 3 months has been negative.

Insider Trading: FAIL

Insider Trading
Figure 19—Insider Trading

  All content in this article is supplied by Wade Hansen of Learning Markets. To learn more about their investor education offerings, please visit learningmarkets.com. Find more great articles from Learning Markets in our news sections.

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