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It is important to note that by clicking on this link you will be leaving this website and any information viewed there is not the property of Destra Capital Investments LLC.

Buy Like an Insider

Investors have been tracking corporate-insider stock purchases for decades.

Why? Corporate insiders− top officers, boards of directors, and major shareholders − have a natural edge over retail investors, and even financial analysts, because they typically know their businesses and industries better than anyone. That’s why, no matter how much research you do, or how much financial news you consume, you’re always a step behind those “in the know”.

If only you could just peek through the keyhole at board meetings around the country, so you could find out what’s really going on behind the scenes.

But Can You Really Peek Through the Keyhole?


Discover How

Tracking Insider Buying

Insiders, by law, are required by the Securities and Exchange Commission (SEC) to file a Statement of Changes in Beneficial Ownership of Securities (Form 4). Form 4 is accessible by the public.

Example Form 4

By tracking these insider transactions, investors may discern valuable information about a company’s prospects. Legitimate insider buying has been used as a sign of stock-price appreciation. Of course insider stock trading activity shouldn’t be the sole technical indicator when deciding to buy or sell a stock. But, insider buying activity may be a good starting point to further investigate a company, either by analyzing the fundamental data of the company or by studying other insider trading related matters such as the stock trading history of the insider, the type of insider (officer or beneficiary owner) etc.

Does Insider Buying Alone Always Predict That the Stock Will Rise?

The answer is no. Insiders can overestimate the value of their special knowledge or be overly optimistic about their own firm’s chances of success. So interpreting the knowledge gleaned from SEC Form 4 filings can be tricky. The questions remain:

  • How much information is in these filings?
  • Which are the salient numbers?
  • How can they be best extracted?

These are questions that are easier to ask, than answer. Many of the Form 4 filings involve purchases as part of compensation (such as the exercise of options). Often, these are more related to liquidity needs than speculation on the company’s performance. Open-market purchases, however, require insiders to take their own money and purchase stock on the open market. “Skin in the game” makes some believe in the more predictive power of this factor.

Although there have been studies that show that insider purchases are profitable, merely imitating insiders still requires plenty of work on your side. You can’t simply buy all stocks with insider purchases and expect to beat the market. There’s much more to a strategy than follow-the-leader. You have to pick WHICH leader and hope you made the right choice.

If You Can’t Beat ‘em, Join ‘em.

Using insider buying information is just one step towards seeking better outcomes from your investments, but your approach should be systematic, analytical, and repeatable, in order to succeed over time.

The Direxion All Cap Insider Sentiment ETF (Ticker: KNOW) provides investors with access to stocks that corporate officers, directors, and shareholders who own more than 5% of each S&P 1500 company’s stock, are accumulating. But that’s just the beginning.

The key benefits of KNOW’s strategy:

  • Allows investors to identify and participate in stocks that corporate insiders are accumulating
  • Offers access to a quantitative, rules-based index approach to equity investing
  • Focuses on insider transactions and analyst ratings to determine weightings within the Index
  • Allocations to sectors within the index can vary significantly from traditional cap-weighted equity benchmark weightings

Financial Advisors, access additional information about insider buying.


Get More Information

Call Our Team:

877 855 3434

or email us at

KNOW@destracapital.com

Direxion Shares are bought and sold at the market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 pm EST (when NAV is normally determined) and do not represent the returns you would receive if you traded shares at other times. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.

Some performance results reflect expense subsidies and waivers in effect during certain periods shown. Absent these waivers, results would have been less favorable.

Risks:

The Fund is non-diversified and include risks associated with concentration risk that results from the Fund’s investments in a limited number of securities. The Fund may at times use derivatives such as futures contracts, forward contracts, options and swaps which could subject it to market risks that may cause price fluctuation over time. Derivatives may expose the funds to additional risks that it would not be subject to if it invested directly in the securities under lying those derivatives, such as counterparty risk. Increased portfolio turnover may result in higher transaction costs and capital gains. For other risks including counterparty risk, tracking error risks and specific risks of exchange traded funds, please read the prospectus.

Distributed by: Foreside Fund Services, LLC. Destra Capital Investments acts as a sub-distributor for The Direxion Insider All Cap Sentiment ETF (Ticker KNOW).

©2017 Destra Capital Management LLC. All rights reserved.

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The material contained on this website is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors.

Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus and summary prospectus contains this and other information relevant to an investment in the fund. Please read the prospectus or summary prospectus carefully before you invest or send money. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.855.3434 or access the literature page of this website.

The information on this website is intended for U.S. residents only. The information provided does not constitute a solicitation of an offer to buy, or an offer to sell securities in any jurisdiction to any person to whom it is not lawful to make such an offer. All rights reserved. “Destra” is a trademark of Destra Capital Management LLC, which is the holding company of Destra Capital Advisors LLC, a federally registered investment advisor, and of Destra Capital Investments LLC, a registered broker-dealer and FINRA member and the distributor of investment product. Market information used on this website is obtained from non-proprietary market sources. The Destra Capital logos are protected under various U.S. Trademark Registrations.