Insider Activity
When corporate executives or other insiders buy shares in their company on the open market, it's usually a very bullish sign. They're putting their own money at risk, betting that the stock price goes up.
When they sell stock in their company, it sometimes reflects their pessimism about the firm's prospects. Be careful, though. Often insiders who own large stakes in a company sell a little bit on a regular basis. That's not necessarily a bearish sign.
An insider is a person inside a company with access to nonpublic material and information that could move the stock price. The government requires insiders to report their transactions to guard against unethical trading and to let other investors know about changes in ownership by the management of the company.
The information comes from documents filed with the Securities and Exchange Commission—mainly what's called a Form 4 and Form 144. Morningstar gets the data from a company called Disclosure, which collects insider information.
A Form 4 is filed when an insider's ownership in a company changes. Maybe the insider bought shares. Maybe the insider sold shares. Maybe the insider exercised options. Any number of things could trigger a change in ownership.
Date
The date of the insider transaction.
Name and Position
The name and position within the company of the insider as shown in the SEC filings.
Number of Shares
The number of shares involved in the transaction.
Transaction
The type of the transaction and number of shares.