Net Insider Buying (3 months)

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Net Insider Buying measures the percentage of sales or purchases from insiders of the company in question. Where an "insider" is defined as a corporate officer, director, or any institutional investors who own at least 10% of the company's outstanding shares.The value gives indication of the confidence the average insider - or those closest to the company - have in the company. If the value is positive, it means that the average insider believes the company's stock will rise. On the other hand, if the percent is negative, it means that insiders are selling their shares in their own company - and indicates that they may have less faith in the company's stock.

It can be calculated as total Shares Bought or Sold by Insiders over a given period divided by total shares held by insiders at the beginning of the period. An "insider" is defined as a corporate officer, director, or any institutional investors who own at least 10% of the company's outstanding shares.


An "insider" is defined as a corporate officer, director, or any institutional investors who own at least 10% of the company's outstanding shares.

Calculation on Wikinvest

The calculation is done as follows:

Percent Net Insider Purchase = Net Purchase / (Current Insider Ownership - Net Purchase) where Net Purchase = total buy - total sell

This calculation takes into account all the buys and sells over the trailing 6 months.

The calculation on Wikinvest includes only the purchase and sale of the company's stock but does not count the granting of stock options, gifts, and the exercise of stock options. These actions are excluded in Wikinvest's calculation, as well as calculations on Yahoo Finance and other financial services. This is done because gifts and stock options do not truly show an act of faith by an employee. Instead, they are simply choosing to exercise an option or gift granted to them. They did not take the initiative to purchase the stock in and of itself and so should not be incorporated in an analysis of percent of net insider purchases.

Examples

  • Company ABC has 300,000,000 total shares held by insiders. Over a six month period, company insiders buy 69 million shares and sell 32 million shares, for a net change of 37 million shares purchased by insiders, bringing the total shares held by insiders to 337,000,000. Over that 6 month period, the percent insider change is 12.33% (37 million / 300 million).
  • Company XYZ has 12,000,000 total shares held by insiders. Over a six month period, company insiders buy 374 thousand shares and sell 1.3 million shares for a net change of 926 thousand shares sold by insiders, bringing the total to 11,074,000 shares. Over that six month period, the percent insider change is –7.72% (–926 thousand / 12 million).
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