WINDERMERE, Fla. ( Stockpickr) -- Corporate insiders sell their own companies' stock for a variety of reasons. They might need the money for a big personal purchase such as a house or to fund a child's wedding. Sometimes they sell as part of a planned selling program that they've put in place for diversification purposes. Other times they sell because they think their stock is fully valued. Some even dump their own stock because they're worried about the state of the economy and think shares could go down significantly.
But they only buy their own shares for one reason: because they think the stock will go up substantially.
I like to search the market for companies that are experiencing heavy insider buying. Remember, corporate insiders know the most about their own companies. They're in the trenches every day and know how their business is doing. They know if big contracts are being signed. They know if demand is picking up for their products and services. Big insider buying is a positive sign worthy of your attention. It could mean that stock is severely undervalued and ready to skyrocket.