Is Fidelity National Financial (NYSE: FNF) headed higher, or lower? That's the question we ask when we evaluate insider buying and selling. We ask because how executives spend their paychecks is often a reflection of what they think of their companies' prospects. 

Of course, not all buys are equal. According to two decades worth of research from Dr. H. Nejat Seyhun, compiled in his book, Investment Intelligence from Insider Trading, buying is most predictive when it (a) comes from the CEO or other top-level executive, and (b) is performed in bulk. Seyhun found buys of between 10,000 and 100,000 shares to be most informative.

How do Fidelity National Financial's managers measure up against Seyhun's benchmarks over the past year? See for yourself:

Insider Rating Bullish: Sales were at prices above current, suggesting the stock has fallen to a reasonable valuation.
Business Description A provider of title insurance, specialty insurance, and claims management services.
Recent Price $13.46
CAPS Stars (out of 5) ***
Percentage of Shares Owned by Insiders 5.04%
Net Buying (Selling)* ($4.85 million)
Last Buyer (% Increase) None over the past 12 months
Last Seller (% Decrease) William P Foley II, Chairman
150,000 shares at $13.56 apiece on Dec. 31, 2009
(Reduced direct holdings by 4%.)
Competitors First American Financial (NYSE: FAF)
Old Republic International (NYSE: ORI)
Stewart Information Services (NYSE: STC)

Sources Form 4 Oracle, Capital IQ, and Motley Fool CAPS. (Data current as of Oct. 26.)
* Open market sales and purchases only.

What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.

Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.

The Foolish view: Bullish
I'm in the midst of investigating a refinancing of our home, so I'm once more dealing with the vagaries of title insurance. Who knew paperwork was such a profitable business?

And yet it is. Fidelity National Financial's margins have been on the rise since 2007, resulting in big earnings gains. Normalized net income is up 123.3% over the past year, Capital IQ reports. That tops most of tech's superstars, including priceline.com (Nasdaq: PCLN), whose normalized net income is up 79% since last fall.

Cash is also flowing again at Fidelity National Financial. The business took in close to $330 million in free cash flow in 2009, and its balance sheet is improving as a result. Debt is now just 23% of equity, down from 36% in 2007.

Regardless, bearish investors worry about a shift in dividend policy and a recent management change. Some Fools call the resulting sell-off a buying opportunity. "Recent drop is an overreaction to CEO change. Former CEO remains with the company, business model is still strong. Very undervalued at $13," wrote All-Star investor Jeffreyw earlier this week.

Insiders would seem to agree with that sentiment. The last sale, made by Chairman William Foley II in December, was at marginally higher prices than the stock trades for today, and earlier sales were made at above $14 a share. There appears to still be buying room at current prices.

Do you agree? Disagree? Log into Motley Fool CAPS today and tell us how you would rate Fidelity National. You can also add the stock to your watchlist.

And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand.