Peter Lynch:

Insiders might sell their shares for any numbers of
reasons,but they buy them for only one: they think the price will rise.

Michael Lauer(stock market wizard):

I want to see either company share repurchases or insider buying. When the senior executives are buying shares for themselves,and particularly when the company is repurchasing its stock for the treasury, it sends a strong message that the downside is often limited and provides an added safety net.

Steve Watson(stock market wizard):

It also helps if there is insider buying by management, which confirms prospects for an improvement in the company outlook.

Ahmet Okumus(stock market wizard):

I buy companies that have a good balance sheet, a high book value, consistent business track records,good management, and large insider buying ownership.

Jack Schwager(author of "stock market wizards"):

Insider buying is an important confirming condition.

The willingness of management or the company to buy its own stock may not be a sufficient condition to buy a stock, but it does provide strong confirmation that the stock is a good investment. A number of traders cited insider buying as a critical element in their stock selection process:Lauer,Okumus, and Watson, to name a few.

Okumus stresses that insider buying statistics need to be viewed in relative terms. "I compare the amount of stock someone buys with his net worth and salary. For example, if the amount he buys is more than his annual salary, I consider that significant." Okumus also points out the necessity of making sure that insider buying actually represents the purchase of new shares, not the exercise of options.

H.Nejat Seyhun(author of "Investment Intelligence from Insider Trading"):

When executives bought shares in their own companies, the stock tended to outperform the market by 8.9% over the next 12 months.