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Reasons for selling a stock can be many, but there's only one reason for insiders to buy : they...

  • Wednesday, May 16, 2012, 7:57 PM ET
    Reasons for selling a stock can be many, but there's only one reason for insiders to buy : they expect the stock to go higher. Looking for a leg-up on where to put some money to work? Here's what a couple insiders have been doing this week: On Monday, Valeant Pharmaceuticals' (VRX) Director, Laurence E. Paul, bought 5k shares of VRX, while on the same day Rosetta Resources (ROSE) Executive VP, CFO & Treasurer John E. Hagale bought 6k worth of of his own company as well.
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  •  
    "but there's only one reason for insiders to buy: they expect the stock to go higher."

    Untrue. Insiders sometimes buy their own stock as a gesture to stop a pummeled stock from declining further. Insiders know that many people (and HFT machines) reflexively buy when an insider buys. Besides, many insiders are stupid buyers who buy at elevated valuations when the momentum is hot--just like average knuckleheads on the Street.
    16 May 2012, 08:30 PM Reply Like
  •  
    Right. Someone once called it "show the flag" buying. $250K worth of stock is chicken feed to most execs. Call me when they buy 10 or 20 million bucks worth.
    16 May 2012, 09:43 PM Reply Like
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