A few weeks ago I told you about a very strong situation unfolding concerning insider transactions for one particular stock. Since some time has passed, I wanted to give you some insight into what has happened to that stock, and what could happen next.
So, has insider influence overcome negative characteristics to alter the stock’s price?
Let’s find out…
You may remember my article weeks ago about how some insider actions are more meaningful than others, and how one of the most powerful situations was beginning to unfold with Herbalife Ltd. (HLF).
That’s because four company officers of HLF decided to buy shares that valued more than $1.76 million within a span of just five days!
That certainly tells us something…but what happened to HLF since then?
Here is HLF’s chart from Stockcharts.com:
As you can see, those insider purchases occurred after a big dip in the price of HLF, and possibly caused the short upswing immediately following the buys.
What we can’t know for sure is whether the officers bought the stock because they had inside information, or because they viewed the price at the time to be a bargain.
However, like I said in the last HLF article, anytime several officers make big purchases in company shares within a small time frame, it strongly indicates that they know something that could likely push the price of the shares up.
That’s just one way insiders try to take advantage of something in order to make a nice profit…
But from the chart we can see that the price hasn’t shot up. So you might expect the insiders to back off, right?
WRONG!
Instead, four more insiders joined the party and bought more than another $550,000 worth of shares between August 5 and 12.
But what does that tell us?
Well, the more insiders purchasing that occurs makes it more likely that the insiders are acting on inside information, not just bargain impulse.
And although I wouldn’t buy this stock at the moment, I am definitely keeping an eye on it because this is some significant insider buying.
The important part for us will be to know when to get in on this trade, if at all, in order to make big profits.
