As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money. So let's look at two noteworthy recent insider buys.
On Friday, Reata Pharmaceuticals ( RETA ), R. Kent McGaughy Jr., made a $484,016 buy of RETA, purchasing 17,000 shares at a cost of $28.47 a piece. Reata Pharmaceuticals Inc is trading off about 0.3% on the day Tuesday. Before this latest buy, McGaughy Jr. bought RETA at 2 other times during the past twelve months, for a total cost of $5.66M at an average of $24.93 per share.
And at Capital Southwest ( CSWC ), there was insider buying on Thursday, by Director David R. Brooks who bought 2,000 shares for a cost of $16.66 each, for a total investment of $33,326. Before this latest buy, Brooks made one other buy in the past twelve months, purchasing $166,217 shares at a cost of $15.98 a piece. Capital Southwest is trading up about 1.9% on the day Tuesday.