When key insiders such as executives, directors, and major shareholders purchase company shares, it is often seen as a bullish signal for the stock's future performance. These insiders are typically assumed to have deeper insights and a more thorough understanding of the company’s operations and strategic direction compared to the general public. Accordingly, their decisions to invest are interpreted as a vote of confidence, reflecting their belief in the company’s potential growth and stability.
However, when the stock in question is selling off after tepid guidance - and from a growth company that's not yet profitable, at that - can investors take the same bullish cues from insider buying? Or is the insider activity in these cases simply an attempt to support a faltering share price?
