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When Looking for the Best Dividend Stocks Follow the LONG-TIME Insiders

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It is important to know the trading history of an insider when looking for the best dividend stocks or judging the relative significance of insider trading signal. This rule particularly applies to new directors and C-Level officers.
 
Insiders with long trading history are more significant than insiders will short trading history. Before choosing the best dividend stocks or any stocks, try to get a hold of an insider history than has at least a few years of data and try to find the date for the insider had come an insider. A useful method is to look at the total holdings of the insider after the trade. If the recent purchase accounts for all the insider's holdings, it may be the insider's first transaction.
 

Look for DIRECT Ownership


 
Direct versus indirect ownership is a straightforward concept. Direct ownership means that the shares are actually registered under the insider's name. Generally speaking, insider trades of direct holdings are more significant than indirect ones. This is simply a nod to the common sense that individuals are more likely to practice more discretion when the result hits them directly in the pocketbook.
 
By contrast, when an indirect trade involves a partnership or corporate entity, the stock's rise or fall affects the insider's financial position much less.
 
An exception to this rule is the indirect ownership is via the insider's spouse or a child's trust fund. It is difficult to argue that the insider would practices less discretion than if it were his own account. A quick call to the firm's investor relations department for more details on the relationship usually makes it very clear whether we should view it as significant.
 
Do you know you can use the Research Tools to search for Direct Ownership insider trade transactions?
 

 

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Disclaimer

InsidersLab.com focuses on tracking and monitoring insider trading activities in the US stocks market. "Insider Trading" means trading activities created by company directors, senior officers, individual substantial shareholders, and institutional shareholders. InsidersLab.com does not represent, warrant, nor endorse the accuracy, reliability, completeness or timeliness of any of the information, content, views, opinions, recommendations or advertisements (collectively, the "Materials") contained on, distributed through, or linked, downloaded or accessed from any of the services contained on the website (the "Service"), nor the quality of any products, information or other materials displayed, purchased, or obtained by you as a result of an advertisement or any other information or offer in or in connection with the Service (the "Products"). InsidersLab.com collects insider trading information from different public sources such as newspapers, financial information websites, and government statistics publications. You hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the Materials is provided on the InsidersLab.com website or emails with a view to inviting, inducing or encouraging any person to make any kind of investment decision. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a person authorized to give it.