There's a saying about insider stock trading activity: Executives sell for many reasons, but there's only one reason to buy. With that in mind, Snowflake (NYSE: SNOW)'s new CEO, Sridhar Ramaswamy, made headlines after disclosing a $5 million purchase of company stock.

There's much to like about the data lake and analytics company, which is also a holding in Berkshire Hathaway's portfolio. But when insiders buy, it's usually a statement. What is Ramaswamy saying about the stock today?

High-level executives within a corporation must disclose their stock buying and selling activities. These insiders may sell shares for many reasons. For some, stock may represent the bulk of their compensation, so they must liquidate shares for income. Insiders sell for tax reasons, too. And yes, sometimes an insider loses confidence in the company's direction, or feels the stock is overvalued and wants to cash in.

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Source Fool.com