Logic suggests that a link might exist between insider trades and share repurchases because of their potential to signal mispricing when market prices deviate from fair value; both events emanate from essentially the same set of decision makers. Using the overall repurchase sample, adding insider-trading information is generally not helpful. For “value” buyback companies, however, where perceived mispricing may be a more important factor, insider trading provides a strong complement to the repurchase signal.
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