What does insider buying signal?

Insider buying is the purchase of a company's shares by its own directors, officers, or large (10%+) holders, disclosed through regulatory filings. It draws attention because of an old market adage: insiders sell for many reasons (taxes, diversification, a house), but they buy for one — they believe the stock is undervalued.

It is most informative when: the buyer is a CEO, CFO, or founder rather than a junior director; the purchases are open-market buys (not options being exercised); the dollar amounts are meaningful relative to the person's wealth; and several insiders buy together (a "cluster"), which Strikepoint News's insider tool surfaces.

Caveats: insiders can be wrong, and small "optical" buys are sometimes made to signal confidence. Insider buying is a supporting signal, not a thesis on its own — strongest when it lines up with a catalyst like a discovery hole or a re-rating. US insiders file SEC Form 4; Canadians file on SEDI.