Peter Lynch, regarded as one of the greatest investors of all time, notes “insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”

University of Michigan professor and noted insider trading researcher discovered that when insiders bought shares of their own companies, the stocks outperformed the total market by 8.9% over the next 12-month period. When they sold shares, the stock underperformed 5.4%.