![CEOStockWatcher's tweet photo. [RESEARCH] Do stocks outperform when insiders buy the dip?
[academic research]
Seyhun wrote a few papers + a book called “Investment Intelligence from Insider Trading” in the 90s that found that insiders are contrarian investors (buy low, sell high) and that insiders outperform. He also found that aggregate insider trading data is able to predict future stock market performance (the basis for our insider sentiment score)
Lakonishok & Lee (2001), “Are Insider Trades Informative?” reaffirmed these findings and found that insider purchases outperform even after controlling for valuation
Jenter (2003), “Market Timing and Managerial Portfolio Decisions” found that insiders buy when they believe the market is fundamentally undervaluing their company
Lasfer (2024) - "Corporate insiders' exploitation of investors' anchoring bias at the 52-week high and low" found that insiders do significantly more buying at 52-week lows and way more selling at 52-week highs, but their purchases at both the 52-week high and low significantly outperform
[ceo watcher research]
The CEO Watcher database has all insider trades back to 2009. Before any analysis (unless otherwise noted), we remove all scheduled trades (Employee Stock Purchase Plans, Tax Sales, 10b5-1 Plans, Dividend Reinvestments, etc) and all Public Offerings, Private Placements, and Purchase Agreements. We also remove any erroneous trades (mismatching transaction codes, when the filing date is more than one month after the transaction date, etc) and any super small trades (<$5,000).
Looking at insider purchases after one-month stock price dips, you’ll see that dip buys outperform the S&P across all timeframes (next 1M/3M/6M/1Y) with improving performance as the dip size increases. (image 1)
These returns are more volatile than the S&P, which we can see by looking at the median returns. The S&P mean and median returns are very similar (as expected), while the median return for insider dip buys falls a bit due to some insider dip buys that massively outperform, pulling the mean up.
However, for dips greater than 20%, the median dip buy still outperforms the S&P. (image 2)
Unlike much of the academic research, which finds that insider purchases only outperform for small caps (generally speaking, not necessarily for dip buys), we see significant outperformance for both small and large caps after dip buys. (<$2B mkt cap is small cap, >=$2B is large cap). (images 3+4)
The data also has fairly large sample sizes, with the bottom end ranging from 868 purchases for the Large Cap 1m_ago < -30% group to 7126 for the All Cap 1m_ago < -30% group (the most restrictive 1m cutoff).
[appendix] I'm going to respond to this post with different cuts of the data. Feel free to ask for any specific cut you would like to see](https://pbs.twimg.com/media/G6j1TCEXEAA3Ayd.png)
![CEOStockWatcher's tweet photo. [RESEARCH] Do stocks outperform when insiders buy the dip?
[academic research]
Seyhun wrote a few papers + a book called “Investment Intelligence from Insider Trading” in the 90s that found that insiders are contrarian investors (buy low, sell high) and that insiders outperform. He also found that aggregate insider trading data is able to predict future stock market performance (the basis for our insider sentiment score)
Lakonishok & Lee (2001), “Are Insider Trades Informative?” reaffirmed these findings and found that insider purchases outperform even after controlling for valuation
Jenter (2003), “Market Timing and Managerial Portfolio Decisions” found that insiders buy when they believe the market is fundamentally undervaluing their company
Lasfer (2024) - "Corporate insiders' exploitation of investors' anchoring bias at the 52-week high and low" found that insiders do significantly more buying at 52-week lows and way more selling at 52-week highs, but their purchases at both the 52-week high and low significantly outperform
[ceo watcher research]
The CEO Watcher database has all insider trades back to 2009. Before any analysis (unless otherwise noted), we remove all scheduled trades (Employee Stock Purchase Plans, Tax Sales, 10b5-1 Plans, Dividend Reinvestments, etc) and all Public Offerings, Private Placements, and Purchase Agreements. We also remove any erroneous trades (mismatching transaction codes, when the filing date is more than one month after the transaction date, etc) and any super small trades (<$5,000).
Looking at insider purchases after one-month stock price dips, you’ll see that dip buys outperform the S&P across all timeframes (next 1M/3M/6M/1Y) with improving performance as the dip size increases. (image 1)
These returns are more volatile than the S&P, which we can see by looking at the median returns. The S&P mean and median returns are very similar (as expected), while the median return for insider dip buys falls a bit due to some insider dip buys that massively outperform, pulling the mean up.
However, for dips greater than 20%, the median dip buy still outperforms the S&P. (image 2)
Unlike much of the academic research, which finds that insider purchases only outperform for small caps (generally speaking, not necessarily for dip buys), we see significant outperformance for both small and large caps after dip buys. (<$2B mkt cap is small cap, >=$2B is large cap). (images 3+4)
The data also has fairly large sample sizes, with the bottom end ranging from 868 purchases for the Large Cap 1m_ago < -30% group to 7126 for the All Cap 1m_ago < -30% group (the most restrictive 1m cutoff).
[appendix] I'm going to respond to this post with different cuts of the data. Feel free to ask for any specific cut you would like to see](https://pbs.twimg.com/media/G6j1StHWwAAWKph.jpg)
![CEOStockWatcher's tweet photo. [RESEARCH] Do stocks outperform when insiders buy the dip?
[academic research]
Seyhun wrote a few papers + a book called “Investment Intelligence from Insider Trading” in the 90s that found that insiders are contrarian investors (buy low, sell high) and that insiders outperform. He also found that aggregate insider trading data is able to predict future stock market performance (the basis for our insider sentiment score)
Lakonishok & Lee (2001), “Are Insider Trades Informative?” reaffirmed these findings and found that insider purchases outperform even after controlling for valuation
Jenter (2003), “Market Timing and Managerial Portfolio Decisions” found that insiders buy when they believe the market is fundamentally undervaluing their company
Lasfer (2024) - "Corporate insiders' exploitation of investors' anchoring bias at the 52-week high and low" found that insiders do significantly more buying at 52-week lows and way more selling at 52-week highs, but their purchases at both the 52-week high and low significantly outperform
[ceo watcher research]
The CEO Watcher database has all insider trades back to 2009. Before any analysis (unless otherwise noted), we remove all scheduled trades (Employee Stock Purchase Plans, Tax Sales, 10b5-1 Plans, Dividend Reinvestments, etc) and all Public Offerings, Private Placements, and Purchase Agreements. We also remove any erroneous trades (mismatching transaction codes, when the filing date is more than one month after the transaction date, etc) and any super small trades (<$5,000).
Looking at insider purchases after one-month stock price dips, you’ll see that dip buys outperform the S&P across all timeframes (next 1M/3M/6M/1Y) with improving performance as the dip size increases. (image 1)
These returns are more volatile than the S&P, which we can see by looking at the median returns. The S&P mean and median returns are very similar (as expected), while the median return for insider dip buys falls a bit due to some insider dip buys that massively outperform, pulling the mean up.
However, for dips greater than 20%, the median dip buy still outperforms the S&P. (image 2)
Unlike much of the academic research, which finds that insider purchases only outperform for small caps (generally speaking, not necessarily for dip buys), we see significant outperformance for both small and large caps after dip buys. (<$2B mkt cap is small cap, >=$2B is large cap). (images 3+4)
The data also has fairly large sample sizes, with the bottom end ranging from 868 purchases for the Large Cap 1m_ago < -30% group to 7126 for the All Cap 1m_ago < -30% group (the most restrictive 1m cutoff).
[appendix] I'm going to respond to this post with different cuts of the data. Feel free to ask for any specific cut you would like to see](https://pbs.twimg.com/media/G6j1SXjWgAAmBCl.png)
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[RESEARCH] Do stocks outperform when insiders buy the dip?
[academic research]
Seyhun wrote a few papers + a book called “Investment Intelligence from Insider Trading” in the 90s that found that insiders are contrarian investors (buy low, sell high) and that insiders outperform. He also found that aggregate insider trading data is able to predict future stock market performance (the basis for our insider sentiment score)
Lakonishok & Lee (2001), “Are Insider Trades Informative?” reaffirmed these findings and found that insider purchases outperform even after controlling for valuation
Jenter (2003), “Market Timing and Managerial Portfolio Decisions” found that insiders buy when they believe the market is fundamentally undervaluing their company
Lasfer (2024) - "Corporate insiders' exploitation of investors' anchoring bias at the 52-week high and low" found that insiders do significantly more buying at 52-week lows and way more selling at 52-week highs, but their purchases at both the 52-week high and low significantly outperform
[ceo watcher research]
The CEO Watcher database has all insider trades back to 2009. Before any analysis (unless otherwise noted), we remove all scheduled trades (Employee Stock Purchase Plans, Tax Sales, 10b5-1 Plans, Dividend Reinvestments, etc) and all Public Offerings, Private Placements, and Purchase Agreements. We also remove any erroneous trades (mismatching transaction codes, when the filing date is more than one month after the transaction date, etc) and any super small trades (<$5,000).
Looking at insider purchases after one-month stock price dips, you’ll see that dip buys outperform the S&P across all timeframes (next 1M/3M/6M/1Y) with improving performance as the dip size increases. (image 1)
These returns are more volatile than the S&P, which we can see by looking at the median returns. The S&P mean and median returns are very similar (as expected), while the median return for insider dip buys falls a bit due to some insider dip buys that massively outperform, pulling the mean up.
However, for dips greater than 20%, the median dip buy still outperforms the S&P. (image 2)
Unlike much of the academic research, which finds that insider purchases only outperform for small caps (generally speaking, not necessarily for dip buys), we see significant outperformance for both small and large caps after dip buys. (<$2B mkt cap is small cap, >=$2B is large cap). (images 3+4)
The data also has fairly large sample sizes, with the bottom end ranging from 868 purchases for the Large Cap 1m_ago < -30% group to 7126 for the All Cap 1m_ago < -30% group (the most restrictive 1m cutoff).
[appendix] I'm going to respond to this post with different cuts of the data. Feel free to ask for any specific cut you would like to see
![CEOStockWatcher's tweet photo. [RESEARCH] Do stocks outperform when insiders buy the dip?
[academic research]
Seyhun wrote a few papers + a book called “Investment Intelligence from Insider Trading” in the 90s that found that insiders are contrarian investors (buy low, sell high) and that insiders outperform. He also found that aggregate insider trading data is able to predict future stock market performance (the basis for our insider sentiment score)
Lakonishok & Lee (2001), “Are Insider Trades Informative?” reaffirmed these findings and found that insider purchases outperform even after controlling for valuation
Jenter (2003), “Market Timing and Managerial Portfolio Decisions” found that insiders buy when they believe the market is fundamentally undervaluing their company
Lasfer (2024) - "Corporate insiders' exploitation of investors' anchoring bias at the 52-week high and low" found that insiders do significantly more buying at 52-week lows and way more selling at 52-week highs, but their purchases at both the 52-week high and low significantly outperform
[ceo watcher research]
The CEO Watcher database has all insider trades back to 2009. Before any analysis (unless otherwise noted), we remove all scheduled trades (Employee Stock Purchase Plans, Tax Sales, 10b5-1 Plans, Dividend Reinvestments, etc) and all Public Offerings, Private Placements, and Purchase Agreements. We also remove any erroneous trades (mismatching transaction codes, when the filing date is more than one month after the transaction date, etc) and any super small trades (<$5,000).
Looking at insider purchases after one-month stock price dips, you’ll see that dip buys outperform the S&P across all timeframes (next 1M/3M/6M/1Y) with improving performance as the dip size increases. (image 1)
These returns are more volatile than the S&P, which we can see by looking at the median returns. The S&P mean and median returns are very similar (as expected), while the median return for insider dip buys falls a bit due to some insider dip buys that massively outperform, pulling the mean up.
However, for dips greater than 20%, the median dip buy still outperforms the S&P. (image 2)
Unlike much of the academic research, which finds that insider purchases only outperform for small caps (generally speaking, not necessarily for dip buys), we see significant outperformance for both small and large caps after dip buys. (<$2B mkt cap is small cap, >=$2B is large cap). (images 3+4)
The data also has fairly large sample sizes, with the bottom end ranging from 868 purchases for the Large Cap 1m_ago < -30% group to 7126 for the All Cap 1m_ago < -30% group (the most restrictive 1m cutoff).
[appendix] I'm going to respond to this post with different cuts of the data. Feel free to ask for any specific cut you would like to see](https://pbs.twimg.com/media/G6j1TVaWkAAb_wv.png)
Exec Chairman continues buying American Assets Trust $AAT
He purchased $234.00K (150th largest purchase, out of 191).
This insider has purchased the stock 6 times in the last 30 days.
Riskified $RSKD insiders have been selling recently
Director (Shachar Erez) at RISKIFIED LTD. $RSKD sold $1.00M (3rd largest sale, out of 6).
2 other insiders also sold the stock in the last 30 days.
Director continues buying ContextLogic $LOGC
Director (LEVY PAUL S) purchased $232.34K (10th largest purchase, out of 10).
1 other insider also purchased the stock in the last 30 days.
Chief Commercial Officer at $ARM continues selling
They sold $2.64M (2nd largest sale, out of 6).
This decreased their listed holdings by -24%.
Rip Sell: the stock was up 90% in the previous month.
4 other insiders also sold the stock in the last 30 days.
Chief Executive Officer at Pagaya Technologies Ltd. $PGY purchased $250.55K (2nd largest purchase, out of 2).
Rip Buy: the stock was up 35% in the previous 3 months.
Their last purchase was 785 days ago.
Director (Keyes James W) at Murphy USA Inc. $MUSA sold $1.20M (largest sale ever, out of 2).
This decreased their listed holdings by -13%.
Their last sale was 643 days ago.
4 other insiders also sold the stock in the last 30 days.
Insiders at $AXON are selling this 20% jump in the last month
COO & CFO sold $2.89M (3rd largest sale, out of 15).
Rip Sell: the stock was up 21% in the previous month.
3 other insiders also sold the stock in the last 30 days.
Comstock $LODE insiders have started buying
Director (Pei Steven Yu-Tsung) purchased $1.45M (largest purchase ever, out of 2).
This increased their listed holdings by 23%.
3 other insiders also purchased the stock in the last 30 days.
Director (Higashi Emiko) at RAMBUS INC $RMBS sold $1.60M (largest sale ever, out of 12).
This decreased their listed holdings by -16%.
Rip Sell: the stock was up 49% in the previous month.
5 other insiders also sold the stock in the last 30 days.
Founder at BRC Inc. $BRCC sold $2.98M (3rd largest sale, out of 3).
Rip Sell: the stock was up 37% in the previous month.
Reversal: they made 1 straight purchases before this sale.
Their last sale was 624 days ago.
A director continues buying Patria Investments $PAX
Director (Neto Olimpio Matarazzo) purchased $349.95K (2nd largest purchase, out of 4).
This insider has purchased the stock 4 times in the last 30 days.
Director (Pegram Michael E) at Caesars Entertainment, Inc. $CZR sold $1.61M (largest sale ever, out of 2).
This decreased their listed holdings by -26%.
Reversal: they made 7 straight purchases before this sale.
Their last sale was 1715 days ago.
Nucor $NUE execs have been selling the run
Executive Vice President sold $3.40M (largest sale ever, out of 13).
This decreased their listed holdings by -17%.
Rip Sell: the stock was up 14% in the previous month.
8 other insiders also sold the stock in the last 30 days.
CHAIRMAN AND CEO at PhenixFIN Corp $PFX purchased $389.61K (6th largest purchase, out of 32).
This insider has purchased the stock 2 times in the last 30 days.
Director (KIRSCH ARTHUR S) at Liquidia Corp $LQDA sold $1.73M (largest sale ever, out of 5).
Rip Sell: the stock was up 44% in the previous month.
Reversal: they made 3 straight purchases before this sale.
5 other insiders also sold the stock in the last 30 days.
Best insider trading platform on the internet at https://t.co/pw8DUClBe4
Now $35M in open market purchases of Robinhood $HOOD by RIBBIT Capital.
Unusual to see a VC buying in the public markets
Chief Legal & Compliance Off. at MILLICOM INTERNATIONAL CELLULAR SA $TIGO sold $4.36M (first-ever sale).
This decreased their listed holdings by -22%.
Rip Sell: the stock was up 76% in the previous 6 months.
Lee Enterprises $LEE director continues to buy
Director (Hoffmann David Henry) purchased $390.94K (5th largest purchase, out of 13).
Rip Buy: the stock was up 29% in the previous month.
This insider has purchased the stock 6 times in the last 30 days.
Insiders continue selling the pop at Innodata $INOD
EVP and COO sold $4.42M (5th largest sale, out of 25).
This decreased their listed holdings by -22%.
Rip Sell: the stock was up 159% in the previous month.
4 other insiders also sold the stock in the last 30 days.
Chief Executive Officer, Wind at GE Vernova Inc. $GEV sold $4.57M (first-ever sale).
This decreased their listed holdings by -72%.
Rip Sell: the stock was up 61% in the previous 6 months.
1 other insider also sold the stock in the last 30 days.
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