To Motley Fool co-founder and CEO Tom Gardner, there's nothing more telling about a company's future potential than executives with skin in the game.

With that in mind, the recent news that General Electric (GE 2.77%) insiders scooped up $1.36 million in GE shares is a welcome surprise for shareholders like myself. When leadership invests their own money, it signals their belief in the long-term prospects of the company. It could also indicate an attractive buy-in point for individual investors.

A gas turbine. Source: GE.

A taste of their own cooking
In the paraphrased words of the legendary investor Peter Lynch, "There are many reasons insiders sell, but only one reason insiders buy." Executives who believe that the opportunities outweigh the challenges at a company will put their money where their mouths are. And who better to assess the challenges and opportunities a company faces than insiders?

In General Electric's case, the insider activity is particularly interesting because CEO Jeffrey Immelt opened his pocketbook to acquire shares. Last week, Immelt purchased 40,000 shares at about $25 per share for a total of just more than $1 million. That brings Immelt's total ownership to 1.86 million shares, worth about $46.7 million at today's prices. The other executives who snatched up shares were Geoffrey Beattie and James Rohr, both independent directors who acquired a combined 14,000 shares.

For Immelt, the purchase marks his first open-market acquisition of GE's stock since early 2011, when he bought the same number of shares for about $21 a pop. Back then, GE shares were priced at about 19 times earnings versus a price-to-earnings ratio of 17.4 today. What's more, GE appears to be on better footing now by almost any measure. Since 2011, GE has shed unrelated businesses like NBC Universal, laid out a sound growth strategy, bolstered its dividend, and right-sized its banking unit, GE Capital.

Meanwhile, the recent market downturn and negative sentiment from Wall Street have resulted in a greater than 12% decline in GE's shares since the beginning of the year. While some experts believe a lackluster performance during January could set the tone for a dismal year, buyers of great businesses -- also known as "Foolish" investors -- focus on the underlying fundamentals of companies and have a longer time frame in mind.

Following an impressive end to the year with a bulging order backlog, GE's fundamentals look more attractive now than they have in years. And visibility into future orders provides some cushion in the event of an economic slowdown. Regardless of the broader economy, it looks like GE's executives will stay plenty busy in the months to come.

Foolish takeaway
When it comes to evaluating a company as vast as GE, there's no "silver bullet" substitute for great analysis. Investors really need to have a grasp of all of the moving parts to assess what the stock might be worth. However, insider ownership might be one of the most important elements, and it's clear why managers and directors are snatching up shares: GE looks cheap after the recent sell-off. For those on the outside looking in, perhaps now is a good time to place your bets on "the General."