5 Ways to Create Shareholder Value

The different ways you can create value for shareholders

February 2022

5 Ways to Create Shareholder Value in 2022 – As an organization, you always look for new ways to create value for your shareholders. After all, they are the ones who have invested in company stock, and you want to generate more value for them so that they continue investing. A company that generates shareholder value is also more attractive for new investors. Therefore, you must always be on the lookout for new ways to create shareholder value for your investors.

5 Ways to Create Shareholder Value In 2022

That is easier said than done, but we will be sharing some of the best ways you can create shareholder value right here. These include the following:

#1 of 5. Don’t Manage Your Earnings – Increase Shareholder Value

Corporations that are only looking to generate profit fail to look at the bigger picture, i.e., thinking in terms of their investors’ best interests. You shouldn’t put a limit on your earning potential and not concentrate on investments that generate value. The best thing is not to prioritize short-term gains, as that won’t allow you to maximize shareholder value. Ensure that whatever decision you make regarding your company’s earnings is always in the shareholders’ best interests.

#2 of 5. Hold Assets that Maximize Value – Generate Shareholder Value

Companies can generate shareholder value by maximizing their investment in assets that produce long-term results. You should only focus on acquiring assets designed to produce results for your organization as that will improve confidence among shareholders. That will help you in the long run as more investors will think your company is an attractive investment. Not only will that help you attract investors, but it will also help you generate more value for shareholders.

#3 of 5. Make Strategic Decisions Regarding Your Shares – Create Shareholder Value

The best way to create shareholder value is through share buybacks, decreasing the number of shares in the market. It helps to create the earnings per share, and as a result, shareholders get a bigger piece of the pie. Corporations can employ strategic share buyback programs to increase the price of their shares and help generate more value for shareholders in the process. It will maximize share value and ensure that shareholders can earn more profit from their investment.

#4 of 5. Give Cash to Investors in the Form of Dividends – Increase Shareholder Value

If you don’t think that share buybacks are the way forward for your organization, you can instead generate shareholder value by giving out cash to investors in the form of dividends. That will help your shareholders have more trust in the organization and ensure that they double their investment. When shareholders are getting rewards from their investments in the form of dividends, they would be more inclined to buy more shares.

#5 of 5. Reward Your CEOs and Senior Executives – Generate Shareholder Value

When the organization meets its objectives and raises value for all shareholders, you should reward your CEO and senior executives. Giving them appropriate compensation will increase faith from investors who will maximize their investment in the company. That is one of the best ways to generate shareholder value and confidence among investors.

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About the Author:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY SUCCESSFUL, PROFITABLE Traders, Investors, and Institutions:

LEGAL Insider Trading (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks / Share Repurchases by Public Corporations (ie. Apple, Tesla, Netflix, Facebook, Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

3 Ways Diversification Can Go Bad for Investors

The many downsides of diversification for investors

February 2022

3 Ways Diversification Can Go Bad for Investors – Even though diversification is the way to go for investors looking to achieve profits from their investments, it can all go very wrong. You must be smart with your investments when you are diversifying because your returns from the investments will depend on which asset classes you have backed heavily at the end of the day.

3 Ways Diversification Can Go Bad for Investors

Young investors who are keen to diversify their investment portfolios can make mistakes, and we will highlight some of them here as we discuss 3 ways diversification can go bad for investors. That will allow you to have complete knowledge of what not to do when making investments and the different ways diversification can go wrong for investors. Here is what you need to know about diversifying your investments:

1. Investing at the Wrong Time & In the Wrong Investments

The first thing you must ensure when investing is that it is the right time for you. That means you must be in the right frame of mind and emotionally and financially sound to make investments. You will need to take risks, but you can make disastrous decisions when you are not thinking clearly. Even diversification can’t help you if you invest in the wrong stocks, commodities, or bonds. You need to understand the stock market and rely on investments that will offer you returns in the long term.

If you get emotional and are only looking for short-term investments, you will be disappointed. You will miss the big picture and make rash decisions with your investments, which is the opposite of what you must do. You know that you have to diversify your investments, but if it is at the wrong time, you will not get the results you want from them.

2. Avoiding Investing in Different Asset Classes

When investors are new to diversification, they want to play it safe and not have too many different investments. That could be a big mistake because you could end up with similar investments if you don’t broaden your investment net. That defeats the purpose of diversification because you want your investments to be different from one another.

When playing it safe, investors could avoid some asset classes entirely as they don’t understand them completely. Therefore, they don’t capitalize by investing in them and only invest in familiar stocks. If you don’t take risks when investing, diversification may not help you.

3. There is No Script for Diversifying Your Investments

The biggest problem you could face with diversification is that all of your investments could fail at the same time. There no script for diversifying your investments, which means you can’t predict if there is an economic crunch and the stock market, bonds, and commodities all fail at the same time. Even if you have diversified your portfolio, it will not work in your favor because everything will lose value.

That is a real possibility you must consider when making investments, and if the market conditions are taking a turn for the worse, you should hold back your investments. Even though investment diversification holds the key to protecting your investments, you can’t do much if everything goes down in value.

Conclusion of 3 Ways diversification can go bad for investors

So, in conclusion, learning the 3 ways diversification can go bad for investors, can save you money, make your investments more profitable, and help you enjoy your trading and/or investing much more. Keep in mind that it is NOT just diversifying your investments for the sake of diversification that counts, but rather the quality of your investments. Selling off good investments to diversity into bad or poor performing investments is not the way to make more money.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

How to Diversify Your Investment Portfolio?

The best method for diversification of your investments

UPDATED: March 2022

How to Diversify Your Investment Portfolio – One of the most important pieces of advice that any investor should heed is that they shouldn’t solely rely on one investment source. Investors should be savvy and know different ways to invest their money to have a diverse portfolio. That ensures you won’t suffer massive losses if things don’t work out your way or the stock market takes a turn for the worse. It is wise to diversify your investments and think about putting money into different assets and stocks.

How to Diversify Your Investment Portfolio

Every successful investment strategy relies on diversification, as it affords you growth for your investments and protection against losses. However, you must be smart about how to diversify your investment portfolio because nothing is guaranteed if you don’t make suitable investments. That is why we have prepared this short guide on how to diversify your investment portfolio.

What Does Diversification Mean?

When you purchase various asset types, you multiply your means of income, known as diversification, as you are not relying on a single investment. The assets you choose will be part of your investment portfolio. You can diversify your portfolio in several ways, but the main thing you should remember when diversifying your investments is that you must have appropriate protection against losses. You don’t want to be in the position where if one investment fails, it affects your entire investment strategy.

The smart choice would be to make different investments in assets that are in separate markets. That way, you will gain protection in the event of an investment failing. For instance, you could lose all your money if you have only invested in stocks during an economic crunch as the stocks will fall in value. Diversification of your investments means that you won’t suffer catastrophic losses if one area of your investment fails.

How to Diversify Your Investments?

Your diversified investment plan will be different than other investors since it will be based on factors such as income, retirement goals, gender, and age. To learn how to diversify your investment portfolio correctly, you will need to understand what assets present the most value for your portfolio. If you’re thinking in terms of the stock market, you have several choices, which are as follows:

  • You can invest in stocks, which will give you partial ownership of a business
  • You can invest in bonds, which will allow you to profit from a government or business
  • You can invest in commodities such as gold or what to make money when their value rises

To ensure that you properly implement this plan on how to diversify your investment portfolio, you can also diversify your investment in an asset class. For instance, if you invest in stocks, you can invest in multiple types, such as individual stock or a mutual fund. So, if you purchase stock in Apple, you should also buy a mutual fund. That way, you will have two types of stock investments. Even if Apple goes bankrupt, you may lose money from that stock, but you will still have your investment in the mutual fund.  

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

What Investors Can Learn from Insider Trading

Making the most of insider trading as an investor

UPDATED: March 2022

What Investors Can Learn from Insider Trading – When investors are studying the market, making sense of insider trading activity can be one of the hardest challenges they face. After all, they must look at the market dynamics and then figure out whether insiders are making moves based on the rise and fall of share prices.

What Investors Can Learn from Insider Trading

Even though corporate insiders may be engaging in insider trading, it doesn’t mean that insiders have it easy when trying to figure out what financial investments to make in the market.

To make things simpler, we will share what insider trading is, how can an investor learn from insider trading, and what is the best use of insider trading data. So, let’s begin: 

What Is Insider Trading?

The first thing you should know about is that there is illegal insider trading, and then, there is legal insider trading. As an investor, you must first understand the difference between the two to profit more from them. Illegal insider trading occurs when insiders buy and sell shares using nonpublic information. That means insiders are trying to gain an unfair advantage over other investors by using crucial financial information about their company.

Therefore, anyone who is trying to access nonpublic information to use it for their benefit when making trades in the financial market is complicit in illegal insider trading. Some examples of insider trading include the following:

  • The company CEO sells their stock after learning that the company suffered massive losses.
  • The top executives of the company also sell their stock after learning about the heavy financial losses the company suffered during the last quarter
  • Employees sell their shares after learning in the financial report meeting that the company will not post a profit this quarter.

Anyone found guilty of illegal insider trading could face heavy fines and even jail time. The Securities and Exchange Commission (SEC) regulates insider trading and keeps a close watch on anyone involved in insider trading on the financial market.

Insider Trading Isn’t Always Illegal

There are certain times when insider trading isn’t illegal, and this happens when the top executives and insiders in the company are involved in trades that aren’t based on insider information. Most of the time, insiders tend to make trades to raise personal capital. An employee of the company may sell all of their shares because they want to raise capital to purchase a new house or a boat. Also, some corporate executives are given compensation in stock by the company.

That is the reason why you may notice that a top executive of the company has suddenly bought a large number of shares in the company. That doesn’t mean the share prices will rise in the coming months but is generally the executive solidifying their compensation. There is a thin line between legal and illegal insider trading, which shouldn’t be crossed.

Investors looking to learn from insider trading should base their financial decisions on various factors instead of relying solely on insider information.

Conclusion to What Investors Can Learn from Insider Trading

Insider trading has been around for a long time, and you must look at all the factors when making investment decisions as an investor. Even though insider information is important to look at, major corporations have hundreds of insiders, and trying to figure out a pattern may prove to be a difficult proposition for investors.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

Insider Trading Is of More Than One Kind. Here’s Why.

Making sense of insider trading as an investor

UPDATED: March 2022

Insider Trading Is of More Than One Kind Here’s Why. – Using trading plans and stock for compensation for buying and selling shares is a common practice among insiders for major corporations. You shouldn’t automatically see all insider trading activity as actionable because the reasons for their trading activity could be different and driven by their motivation rather than any significant change in market conditions.

Insider Trading Is of More Than One Kind Here’s Why.

Most people assume that when insiders and management are making trades, it means something big will be happening regarding that company’s stock price. However, all trading activity is not driven by the same motivation, and hence, should be understood on its own terms. Similarly, an insider’s shares can’t be observed the same way as the stock you hold.

So, if you’re looking at insider trading activity and trying to make sense of it all, know that all of it not of the same kind. Here’s why.

1. Stock Is Used as Compensation

Most times, a corporation will reward its senior management by offering them stock as compensation for their income payments. Therefore, when you notice a significant number of stocks being bought by a senior official in a company, it could be that the corporation is rewarding them. You can’t assume that something big is happening in the company.

When senior management decides to purchase stock in their company, it doesn’t mean that stock price will rise significantly in the coming weeks and months. However, it does point to the fact that they think the stock is undervalued at this moment in time. Conducting a little analysis of the company will give you a better idea of exactly where the stock price stands concerning the market.

2. The Use of Trading Plans to Sell Shares

Insider trading informed by private knowledge is limited by SEC’s Rule 10b5. That ensures insiders don’t gain any advantage against individuals without this knowledge. Insiders can’t sell shares before any negative news comes to light, and they can’t buy shares cheaply before any news breaks that significantly raises the price of the shares. So what do insiders do in that scenario?

They use trading plans, allowing employees to trade their company’s stocks while removing insider activity from the scenario. Trading plans have a simple function:

  • They are put in motion ahead of time and must be enforced before insider information leaking to the public.

Recognizing trading plans is relatively simple and gives you the knowledge you need to make fair trades without relying too much on insider trading activity.

Conclusion of Insider Trading Is of More Than One Kind Here’s Why.

When looking at insider trading activity, the one thing that you can’t do is to project and assume regarding the performance of a company’s stock. You can’t read too much into insiders’ actions as that won’t help you make better investment decisions. You can’t take action based on someone else’s decision to buy or sell stock in the corporation. Insiders have their motivations for buying and selling stock, and you must look at all the factors before deciding to act on insider trading information.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

Stock Buybacks: What Every Investor Needs to Know

What all investors need to know about stock buybacks

UPDATED: March 2022

Stock Buybacks: What Every Investor Needs to Know – Investors need to have in-depth information about the market conditions and a company’s performance before they decide to invest in their shares. The current trend right now of stock buybacks among major companies is creating problems for investors. Major corporations are investing all their capital into share repurchase to increase the value of their shares. Hence, any investor that is interested in investing in shares must pay a premium for their investment.

Stock Buybacks: What Every Investor Needs to Know

It is a conundrum for investors since they don’t want to jump in when a company repurchases its shares because that means they must pay more for those shares. Investors need to carefully look at the trends surrounding share repurchase and then invest in companies that haven’t yet decided to repurchase their shares. That will allow them to ride the wave of the price increase and get the most returns from their investment. The current market conditions mean that investors must be wary about stock buybacks, as they can make or break their investments.

How to Profit from Stock Buybacks?

As an investor, it is imperative that you look at the market’s major trends and then base your investment decisions based on that. Stock buybacks had become a hot topic of discussion ever since 2018 when most major companies broke all records of share repurchases. That saw major companies increase their stock prices significantly by spending all their excess cash on stock repurchases. Investors can try predicting another such trend in the coming years and invest in companies looking to repurchase their shares.

That will allow them to maximize their investment as companies will raise their share prices through share repurchase. All investors want to get the most value from their investments, which is why so many investors love share buybacks. That allows them to double their investments in no time, and they can profit significantly from the rise in the value of a company’s stock price.

Is Now the Right Time to Invest?

The current pandemic has hit companies hard, which is why stock buybacks are down this year. It has forced companies to think in the long-term and ride out the storm currently to reap the rewards later. Currently, buybacks are down by 30%, a significant dip if you follow the current trend. That makes it an excellent time for investors to invest in companies because they know that companies will repurchase their shares when conditions improve.

Conclusion of Stock Buybacks: What Every Investor Needs to Know

If you’re an investor and want to learn more about share buybacks and how they can be profitable for you, look at the current trends. The market is suitable for investments as share buybacks are down but for how long remains to be seen.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

How and Why You Should Invest in Penny Stocks?

Guide to investing in penny stocks

UPDATED: March 2022

How and Why You Should Invest in Penny Stocks? – Almost every investor today has considered how to invest in penny stocks due to their immense potential. After all, every investor wants to purchase a stock for $2 and watch as it rockets to $200 in a short span. That’s the main appeal of penny stocks, but it doesn’t always work like that. It would help if you learned how penny stocks work before you invest in penny stocks.

How and Why You Should Invest in Penny Stocks?

You need to do your research the way you have to most investing forms. Even though there are no guarantees you will get profitable returns from your investment, you can improve your chances. Here’s our short guide on how and why you should invest in penny stocks.

What Are Penny Stocks?

Stocks that trade below $5 per share are generally described as penny stocks. Most people describe a penny stock as any stock that trades for less than $3 per share, while others look at penny stocks as stocks trading for less than $1 per share. Irrespective of how you look at it, penny stocks are generally cheap stocks you can invest in.

The hope for investors is that when you learn how to invest in penny stocks, the price of the penny stock will slowly rise in the coming months, and you can then sell them off to get a profit.

How to Invest in Penny Stocks?

If you’re interested in investing in penny stocks, you will need to open an account with a broker. That will be one of the most crucial decisions you must make when investing in penny stocks because due to the risks associated with them, most brokerage firms don’t trade in them. Setting up an account is straightforward. All you need to do is choose a company, fill out the application form, give them your identifying information, such as your Social Security number, and then fund your account.

Why Are Penny Stocks So Cheap?

There are two main reasons why a stock may be called a penny stock and be available at cheap rates:

  1. The company issuing the stock is new and doesn’t have a track record of generating investor interest.
  2. The company issuing the stock doesn’t hold any value due to scandals, poor business performance, or legal and regulatory challenges.

Conclusion to Why Are How and Why You Should Invest in Penny Stocks?

An investor who invests in a new company hopes that the stock price will increase as the company grows. An investor will buy stocks in a distressed company hoping that there is a buyout or turnaround. In both cases, the potential returns vary dramatically, which is why penny stocks are so appealing to investors.

As an investor, you are more a speculator here, as you’re not taking past performance into account, which is either inadequate or unknown, but rather on how events will take place in the future.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com  .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

What Investors Can Learn from Insider Trading

Making the most of insider trading as an investor

UPDATED: April 2022

What Investors Can Learn from Insider Trading – It is no coincidence that corporate executives seem to always buy and sell at the right time. After all, the CEOs and CFOs of the world have access to every bit of company information you could ever want.

What Investors Can Learn from Insider Trading

The fact that company executives have unique insights doesn’t mean that individual investors are always left in the dark. Insider trading data is out there for all who want to use it. In this article, we will discuss what insider trading is, how we can understand insider trading, and where to find the relevant data.

What Is Insider Trading?

Answering this question of What Is Insider Trading requires us to explain the two types of insider trading: legal and illegal. First, let’s talk about the illegal kind. Illegal insider trading is the buying or selling of a security by insiders who possess material that is still not made public. The act puts insiders in breach of their fiduciary duty. As you can imagine, illegal insider trading is a definite faux pas for anyone closely involved with a company.

Anybody with material, non-public information can commit the illegal act of insider trading. This means that nearly anybody, including brokers, family, friends, and employees, can be considered an insider. The following are examples of illegal insider trading:

  • The CEO of a company sells a stock after discovering that the company will be losing a government contract next month.
  • The CEO’s son sells the company stock after hearing from his dad that the company will be losing the government contract.
  • A government official realizes that the company will lose the government contract, so the official sells the stock.

The Securities and Exchange Commission (SEC) is extremely strict with those who trade unfairly and, thereby, undermine investor confidence and the integrity of the financial markets. Don’t think that those who place the trades are the only guilty ones. If someone is caught “tipping” an outsider with material, non-public information, that tipster can also be found liable.

Insider Trading Isn’t Always Illegal

An important thing to emphasize here is that Insider Trading Isn’t Always Illegal. Insiders don’t always have their hands tied. Insiders can and do buy and sell stock in their own company legally all the time. Their trading is restricted and deemed illegal only at certain times and under certain conditions. The SEC considers company directors, officials, or any individual with a stake of 10% or more in the company to be corporate insiders.

Corporate insiders are required to report their insider transactions within two business days of the date the transaction occurred. The kind of information found in filings is extremely valuable to individual investors. For example, if insiders are buying shares in their own companies, they might know something normal investors don’t. The insider might buy because they see great potential, the possibility for merger or acquisition in the future, or simply because they think their stock is undervalued.

Insiders might sell their shares for several reasons, but they buy them for only one: they think that the price will rise. Insiders are prevented from buying and selling their company stock within a six-month period. Therefore, insiders buy stock when they feel the company will perform well over the long-term.

Conclusion of What Investors Can Learn from Insider Trading

Insider trading data is nothing new. Investors have been making investment decisions based on the actions of insiders for decades. While the data is important, just remember that large companies have hundreds of insiders, which means trying to determine a pattern can be difficult. So, do your due diligence of a company, but be aware of what insiders are doing, as they probably know more than the rest of the public.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

5 Ways Investors Can Profit Via Legal Insider Trading

How to make legal insider trading work for you and profit from it

UPDATED: April 2022

5 Ways Investors Can Profit Via Legal Insider Trading – Insider trading has been the talk of the town when it comes to the stock market and trading on the stock exchange. While insider trading is being taken to the woodshed, there’s plenty to do with legal insider trading.

5 Ways Investors Can Profit Via LEGAL Insider Trading

By following the smart money, investors can follow the cookie crumbs back to the investing profits. So, here are 5 ways that investors can use insider trading data and information to make better, smarter investment decisions.

1. Generate Ideas for Investing – Profiting from Insider Trading

Investors come up with investment ideas in many different ways. We can use insider trading data to bubble up ideas in companies you would have never heard of otherwise. You can use stock screeners to look for a specific type of buying (say multiple insiders buying stock). From there, you dig deeper into the stocks that show up on the screen and do more research. The insider activity functions as an idea generator to find interesting investment candidates.

2. Follow the Money Flows – Profiting from Insider Trading

When fishermen go deep sea fishing, they use sonar to track the fish, so instead of waiting for a bite, they go where the fish will be. Investing is no different as people want to invest in things that they think will turn out profitable in the future. Insiders do too, which is why they put their money where their mouths are. For a senior manager to put some cash down and buy some stock in their company, it’s a bet on the future.

3. Go Contrarian to Analyst Calls – Profiting from Insider Trading

Investment analysts frequently get stock pickings wrong. These smart people can’t always win as the business is tough. It doesn’t particularly reward bold predictions and, most of the time, analysts are reactive, raising and dropping predictions in hindsight. Insiders are more likely to buy shares when their stock is out of favor with Wall Street analysts. In other words, insider trading has predictive power for future stock returns only when analyst recommendations have changed. If insiders are looking for value, they’ll buy when the stock is out of favor.

4. Examine Other Ways Insiders Get Rich – Profiting from Insider Trading

Insider trading is transparent (the activity is, at least). However, corporate insiders may use other tools to enrich themselves that make it harder for the rest of us to mimic. One of these activities places them directly across the table from other shareholders. There’s evidence that insiders use share buybacks to exploit their access to insider information and make profits at the expense of public shareholders. Managers may initiate share buybacks if they believe they can purchase stock below its fair value through a buyback or sell if the market price is bloated.

5. Piggybacking Government Insider Trading – Profiting from Insider Trading

Recent evidence that government officials exploit insider information (even if it’s not insider trading) isn’t necessarily surprising as congressmen and women seem to regularly make money off of their positions. Members of Congress routinely receive access to confidential information and act upon it. Following politicians to see what they’re investing in is a great signal to where legislation is headed in the future. This could have a broader impact than just on the stocks, and it’s important to follow the money.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .

The Basics of Illegal Insider Trading

Understanding what is insider trading and its consequences

UPDATED: May 2022

The Basics of Illegal Insider Trading – Illegal Insider trading is the purchase or sale of stocks or other securities based on information not available to the general public. It involves a direct breach of fiduciary duty or other violation of trust in which the trader uses insider knowledge to benefit financially.

The Basics of Illegal Insider Trading

Despite many high-profile incidents involving insider trading, many investors are still unsure about what it is, how it works, and why it’s such a big deal. Essentially, insider trading violates key rules and regulations designed to keep the market fair for all investors.

Detailed rules regarding insider trading are complicated and generally vary from country to country. The definition of an “insider” can be significantly different under different jurisdictions. Some may follow a narrow definition and only consider people within the company with direct access to the information as an “insider.” On the other hand, many also consider people related to the company officials as “insiders.”

What Is Insider Trading?

Insider trading happens when someone makes an investment trade based on “material” information not publicly available. In market terms, material information is any detail that could affect a company’s stock price. This information gives the individual an edge that few others have in the market. The trader must typically be someone who has a fiduciary duty to another person, institution, corporation, partnership, firm, or entity.

You can get into trouble if you make an investment decision based upon information related to that fiduciary duty if that information isn’t available to everyone else.

How Insider Information Works?

Insider trading can also arise when no fiduciary duty is present, but another crime has been committed, such as corporate espionage. For example, an organized crime ring that infiltrated certain financial or legal institutions to systematically gain access to and exploit and use private information might be found guilty of such trading, among other charges for the related crimes.

Insider information allows a person to profit in some cases and to avoid loss in others. In either case, it’s an abuse of someone’s knowledge or position of power. It’s illegal because it gives an unfair advantage to people who are “in the know.” Those who have been prosecuted for insider trading include corporate officers, employees, government officials, and those who have tipped them off with insider information.

However, not all insider trading is illegal. Many factors must be considered before the Securities and Exchange Commission (SEC) will prosecute someone for insider trading. The main issues the SEC must generally prove are that the defendant had a fiduciary duty to the company and/or they intended to personally gain from buying or selling shares based upon insider information.

What Are the Penalties for Insider Trading?

Insider trading penalties generally consist of a monetary penalty and jail time, depending on the severity of the case. The SEC has moved to ban trading violators from serving as executives at publicly traded companies.

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About the Author & How YOU Can Profit:  This article is the copyrighted product of the team at BuybackAnalytics.com .

Buyback Analytics is a Top Tier Investing Platform to help investors find, analyze, and profit from investing opportunities not found through traditional investment tools. We specialize in this simple concept:  Follow the trades of Insiders – CONSISTENTLY PROFITABLE Traders, Investors, and Institutions because THEY get Inside Information that YOU don’t:

LEGAL Insider Trading / Inside Traders (CEOs, CFOs, Corporation’s Accountants & Attorneys, Politicians, etc.)
Stock Buybacks (Share Repurchases) by Public Corporations (ie. Apple, Tesla, Netflix, Meta (Facebook), Microsoft, etc.)
Market Moving Institutions (Examples: Market Makers, Investment Banks, Stock Brokerages, Hedge Funds, etc.)

Use of Our Articles: You are welcome to benefit from lots of FREE articles that you can read and learn from on our website blog.  You are also welcome to share or post this information as helpful content to your website or blog audience as long as the article, and this entire byline are left intact, word for word.  If you would like us to provide you with more, or bulk content for your blog or website to educate your audience on basic to expert financial and investor information & techniques, feel free to contact us at info@buybackanalytics.com .