The officers and directors of a company tend to have a unique insider's view of the business, understanding the opportunities and challenges facing the business in a first-hand way that goes beyond the analysis that can be performed by individual investors.
Presumably, the only reason a company insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money ó maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. As the saying goes on Wall Street, "there are many reasons to sell a stock, but only one reason to buy - the expectation of making money."
For this reason, investors are wise to pay attention to the importance of insider buying.
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