Here are five things you should know about insider transactions:

1. TOP CORPORATE PLAYERS MUST REPORT: Key officials of publicly traded companies are required to report any purchases or sales of their company's stock within two days to the Securities and Exchange Commission by filling out Form 4, which can be viewed at the SEC Web site (http://www.sec.gov). This applies to directors, presidents, chief financial officers, general counsel, chief executives, chairmen and other officers as well as anyone who owns more than 10 percent of a company's stock.

2. INSIDER PURCHASES SHOULD BE VIEWED IN CONTEXT: Is the CEO spending a large chunk of his annual pay on the shares? Might he mostly be trying to send a positive message to investors and get them to purchase more stock? Are other company executives and board members also buying? Could they be buying because they are required to have a certain level of ownership?

3. INSIDERS SOMETIMES SELL FOR PERSONAL REASONS: Just because top company officials are selling a large chunk of shares doesn't mean they think the stock is going to tank - although it could. Insiders could be selling because they have a personal use for the proceeds: a house to buy, college tuition costs or other undisclosed reasons. Dig further into company filings, and check what other insiders are doing.

4. INSIDER OWNERSHIP MAY BE MORE IMPORTANT: Companies where the key players have a lot of "skin in the game" - a large ownership stake in the company - are often considered wise buys because their interests are aligned with those of the stockholders. It's a good sign for the company's longer-term outlook.

5. COMPANY FUNDAMENTALS STILL PARAMOUNT: A corporation's overall fundamentals, from its balance sheet to its prospects for business in the near- and long-term future, carry greater significance than an individual insider trade. Check the SEC's Web site for Form 4s as well as 8-K (significant events) and 10-K (annual report) filings, for other evidence of how a company is performing.