When I see multiple insiders investing their own money in their company, I take notice.

Which is why Vertex Pharmaceuticals (VRTX) is one company on my watchlist.

Last Friday, multiple high-ranking officials bought shares.

As you can see, the CEO of VRTX bought over 10,000 shares worth $3.9 million, and the director bought 5,000 shares worth $1.9 million.

Here’s why this matters.

My criteria for insider buys

In my 20+ years of trading experience, I’ve come to realize that insiders buy a stock for only one reason – they think the price is going to go up.

When it comes to finding a strong insider buy, one of the first things I look for is a high trading volume.

In the case of VRTX, there are thousands of shares being bought worth over $1 million dollars. So that’s a strong sign.

But that’s not all.

Next, I ask myself… “who’s buying?”

If it’s a low-ranking official, I usually don’t take much notice.

However, if a top brass is buying shares, then I know something could be up since CEO’s have to earn their money.

VRTX has a CEO buying shares, so that’s sign No. 2.

Unlike insider trading (which is illegal), insider buying is when company members buy shares of their own company. They’re also legally required to publcly disclose their shares. It’s why this is one of the most powerful (and easiest) ways to find winning buy opporuntiies.

Action Plan: With multiple top-ranking officials buying shares, VRTX is on my watchlist for a trade this week.

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