We took every open-market insider purchase filed with the SEC (Form 4, code P) over the last five years - 45,712 of them, market-wide - and measured what each stock did 30, 60 and 90 days later, against the Russell 2000 (a fair yardstick for the small and mid caps where insiders actually buy). The question wasn't "do insider buys work?" but "which insider, and which pattern, is worth following?" Two answers stood out: the role of the buyer matters, and the CFO's signal is the sharpest of the bunch.
Of all the ways to slice insider buying, the buyer's role is one of the more telling - and among the roles, one stands out. Sorting the same 45,712 buys by who did the buying, CFO purchases averaged +5.6% at 30 days and +7.9% at 90 days, and beat the Russell 2000 more often than they trailed it at every horizon - the only large role that did. CEO buys - the ones that get the headlines - were the weakest of the executive roles here: fewer than half were even positive over 90 days (49.3%). That doesn't make a CEO buy meaningless (see the first-buy pattern below), but if you're picking one role to watch, the numbers point at the CFO: the person who knows the cash-flow statement line by line.
| Signal | Sample | Avg. 30d | Avg. 60d | Avg. 90d | % up (90d) | % beat Russell (90d) |
|---|---|---|---|---|---|---|
| CFO buys Chief financial officer |
2,022 | +5.6% | +6.5% | +7.9% | 56.9% | 51.3% |
| Other officer buys | 1,056 | +5.0% | +7.6% | +8.9% | 53.5% | 47.7% |
| Director buys | 18,731 | +2.7% | +3.7% | +4.6% | 53.5% | 47.9% |
| Every insider buy The baseline |
44,316 | +2.9% | +3.3% | +3.8% | 52.1% | 45.8% |
| CEO buys Chief executive |
7,349 | +3.3% | +2.9% | +3.4% | 49.3% | 44.2% |
The second clean pattern was cluster buying - several insiders purchasing the same stock within a month. It scaled almost perfectly: each additional buyer lifted both the return and the win rate.
| Signal | Sample | Avg. 30d | Avg. 60d | Avg. 90d | % up (90d) | % beat Russell (90d) |
|---|---|---|---|---|---|---|
| 2+ insiders within 30 days |
4,860 | +4.1% | +4.3% | +5.3% | 53.2% | 47.2% |
| 3+ insiders | 129 | +0.2% | +4.0% | +5.9% | 60.5% | 51.9% |
| 4+ insiders | 57 | +0.9% | +7.8% | +8.7% | 70.2% | 59.6% |
| 5+ insiders small sample |
25 | +1.4% | +9.5% | +8.6% | 80.0% | 60.0% |
Note the sample sizes: 4+ and especially 5+ insider clusters are rare, so those rows are the strongest but the least certain. The direction, though, is consistent - conviction from more people beat conviction from one.
Stacking signals sharpened the edge further. A CFO buying inside a cluster, a cluster forming near a 52-week low, or an insider's first purchase in over a year all outperformed the average buy. And here's the nuance on CEOs: a CEO's first buy in years was one of the strongest patterns of all - it's the routine CEO buy that underwhelmed, not the rare conviction one.
| Signal | Sample | Avg. 30d | Avg. 60d | Avg. 90d | % up (90d) | % beat Russell (90d) |
|---|---|---|---|---|---|---|
| CFO buying in a cluster | 480 | +6.0% | +6.6% | +8.2% | 59.2% | 51.0% |
| 3+ cluster near the 52-wk low | 4,156 | +3.9% | +3.8% | +4.9% | 58.3% | 48.5% |
| First buy in 1+ year | 3,045 | +5.9% | +6.6% | +8.4% | 57.6% | 48.3% |
| CEO’s first buy in years small sample |
48 | +7.8% | +8.9% | +10.3% | 66.7% | 56.3% |
One consistent theme across every signal: the advantage is strongest in the first 30-90 days and fades after that. Insider buying looks like a short-to-medium-term catalyst, not a set-and-forget signal - which is why we track it live and timestamp every buy on the price chart.
Starting from every open-market purchase (SEC Form 4, code P) of $10K or more filed over the last five years across the US market, we entered each at the closing price on or just after the transaction date and measured its return 30, 60 and 90 days later against the Russell 2000 over the same dates. Roles come from the title the insider filed (CFO, CEO, director, officer, etc.). "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 available daily price history. Returns shown are averages (means), so they line up with how you'd tally your own trades; 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. Caveats: this covers 2021-2026 only - one bull market and the 2022 selloff, not a full range of cycles; and the strongest rows (4+/5+ clusters) have the smallest samples. This is analysis of past filings, not a prediction or investment advice. Past performance does not predict future results.
InsiderTape flags CFO purchases, cluster buying, and first buys in years in real time, plotted right on the price chart. Start a free 7-day trial, cancel anytime.
Does it work? In five years of data, insider clusters beat the Russell 2000 about 60% of the time and the CFO's buy was the sharpest role. See the backtest →
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