Abbott Laboratories CEO Buys $15 Million In Shares

• A global health care company CEO increased his stake after so-so earnings report.
• Those buys also follow headlines about a deal that may have gone sour.
• Insider buying often can be seen as a good sign for investors.

Conventional wisdom says that insiders and 10 percent owners really only buy shares of a company for one reason: They believe the stock price will rise and they want to profit from it. So insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty. Case in point: recent notable buys at Abbott Laboratories (NYSE: ABT).

The Insider Buy

Chairman and CEO Miles White has bought almost 370,000 shares of the health care products maker so far this month. The share prices for those purchases ranged from $40.45 to $40.67. That cost him nearly $15 million. The buys came in the wake last month's so-so third-quarter earnings report and recent headlines about a potentially derailed deal with Alere.

Abbott Labs currently has a market capitalization more $57 billion and offers a dividend yield of about 2.6 percent. Short interest is more than 5 percent of the float, and the consensus recommendation of analysts is to Buy shares. The stock has retreated fractionally in the past week, and it is down more than 12 percent year to date, to below $39, where it was trading on Monday.