What happens after an insider's first buy in years?

Routine insider buying is easy to tune out. But when someone who has not purchased their own stock in a year, two years, or longer suddenly steps in, the change of behavior itself is information. We flagged every open-market buy that ended a gap of at least one, two or three years since that insider's prior purchase, and measured the stock 30, 60 and 90 days later against the Russell 2000.

The longer the silence, the more it meant

Buys that broke a one- or two-year gap were positive more often than the average purchase. The three-year version is noisier (fewer of them), but the through-line holds: a deliberate return after a long absence carries more signal than another buy from someone who buys often.

The CEO's first buy in years

We noted elsewhere that routine CEO buying underwhelmed. The exception is the rare one: when a CEO who has not bought in years finally does, it was among the strongest signals in the whole study, though the sample is small enough to treat as suggestive rather than settled.

The edge is early

As in every slice of this data, the advantage is strongest in the first 30 to 90 days and fades after that. Insider buying reads like a short-to-medium-term catalyst, not a set-and-forget signal, which is why we track it live and mark every buy on the price chart.

Methodology & caveats

We start from every open-market purchase (SEC Form 4, code P) of $10K or more filed over the last five years across the US market, enter at the closing price on or just after the transaction date, and measure the return 30, 60 and 90 days later against the Russell 2000 over the same dates. "Cluster" means that many different insiders bought the same company within 30 days. Option exercises, grants, and obvious price-data errors are excluded, as are tickers with no daily price history. Returns shown are averages (means); because a few big winners can lift an average, we also show how often each signal was simply positive and how often it beat the market. A "first buy" here means the insider's first open-market purchase after a gap of at least the stated length. Caveats: this covers 2021-2026 only, one bull market plus the 2022 selloff, not a full range of cycles. This is analysis of past filings, not a prediction or investment advice. Past performance does not predict future results.