"Buy when insiders buy the dip" is a popular idea. We tested it directly: across 45,712 buys over five years, we isolated purchases made while the stock sat in the lower part of its 52-week range and measured the next 30, 60 and 90 days against the Russell 2000.
A single insider buying near the 52-week low was close to a coin flip and slightly trailed the Russell 2000 over 90 days. Large single buys near the lows fared worst, which fits the value-trap warning: a falling stock plus one big buyer is not enough on its own.
| Signal | Sample | Avg. 30d | Avg. 60d | Avg. 90d | % up (90d) | % beat Russell (90d) |
|---|---|---|---|---|---|---|
| Buy in the lower half of the 52-wk range | 17,318 | +2.9% | +2.6% | +3.6% | 54.6% | 46.5% |
| Buy right at the 52-wk low | 11,488 | +3.2% | +2.8% | +3.5% | 53.8% | 45.4% |
| Large buy near the low value-trap risk | 1,991 | +2.7% | -1.0% | -2.3% | 44.6% | 38.7% |
The near-low signal improved sharply when it came with conviction from more than one person, or from the CFO. Weakness plus a cluster, or weakness plus the sharpest role, was the version worth watching.
| Signal | Sample | Avg. 30d | Avg. 60d | Avg. 90d | % up (90d) | % beat Russell (90d) |
|---|---|---|---|---|---|---|
| CFO buying near the low | 950 | +4.2% | +4.7% | +6.1% | 56.7% | 49.1% |
| 3+ cluster near the low | 4,156 | +3.9% | +3.8% | +4.9% | 58.3% | 48.5% |
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.
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. "Near the low" means the purchase price sat in the lower portion of the trailing 52-week range. 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.
InsiderTape flags CFO buys, cluster buying, first buys in years, and buying near lows in real time, plotted on the price chart. Start a free 7-day trial, cancel anytime.
START FREE TRIAL →