What the Insider Crowd's Buying

This column was originally published on RealMoney on May 31 at 8:25 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Although I am officially on a "sell" signal now and am primarily in cash, I admit to being a bit more impressed this week with the very large number of companies whose insiders are already indicating value during this selloff. I'm not ready to pounce myself, but if you are intent on trying to bottom-feed at this time, you might as well start by looking at what insiders are buying.

When I look at insider trends, I don't just tally the numbers from the raw data. I sort through the filings and assess whether I consider the activity significant. I have various systems to help score the data, but in the end, it comes down to actually pulling up the insider histories of the companies and individual executives to help analyze the actions.

There's just no substitute for eyes-on investigation, and I find that I get much better insight into trends when I stay focused on the higher-quality information that I derive from such analysis. ...