Insider Net Purchases Screen

Performance

  Insider Net Purchases S&P 500
YTD Return: 5.3% 1.3%
Five Year Return: 15.6% 18.6%
Ten Year Return: -3.4% 5.2%
Inception: 0.2% 4.1%
Data as of 3/31/2014
The Insider Net Purchases Screen represents AAII's interpretation of the investment approach and is not determined by the original strategist. The list of passing companies represents a hypothetical portfolio, which is used to track the screen’s performance on a chart.

Passing Companies

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Screening Criteria

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Chart

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Wall Street and individual investors are paying closer attention to the buying and selling activities of corporate insiders in the hopes of catching a glimpse of where a company's stock may be headed.

Such logic certainly makes sense—who else would better know the future prospects of the company and how this may impact future stock price movement? Insiders are privy to information regarding new products, competition, and operating environment-oftentimes long before the companies become large.

This article will discuss several of the issues surrounding insider trading—who insiders are, what requirements insiders must obey regarding the purchase and sale of company stock, why insider data is important, how it can be used in the investment decision-making process, and where you can find data regarding insider transactions.

Who is an Insider?

In legal terms, the Securities Exchange Act of 1934 defines an insider as an officer or director of a public company, or an individual or an entity owning 10% or more of any class of a company's shares. Thus, the term "insider" refers to a wide-ranging number of groups including: large shareholders, directors, and officers.

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