One of the only good indicators if a stock is worth buying or not is considering what the insiders are doing.

If the insiders are purchasing the company’s stock for their own hard earned money it’s a very good sign. On the other side if they are constantly selling there is no rational for buying the stocks they are selling.

That they are selling may not generally mean that something bad is about to happen very soon, but it shows a lack of belief in what they are doing. If they do not believe in what they are doing when they have the inside view of the company and know the market they are operating in very well, why the outsiders should believe.

It is also a difference between when insiders are rewarded stocks and options oppose to when they buy stocks from real hard earned money.

Examples of companies that have showed confidence in the company’s own stock are Coca-Cola and the Washington Post, two of Warren Buffet’s favorites. In Coca-Cola’s 2003 10K statement, management disclosed that, “Since the inception of our initial share repurchase program in 1984 through the current program as of December 31, 2003, we have purchased more than 1 billion shares of our Company’s common stock. This represents 33 percent of the shares outstanding as of January 1, 1984 at an average price per share of $14.07.â€?