Do insiders know something when they buy their own company’s stock?

News that an executive bought shares in their own company often reads like a tip. I work at Equibles, and we measured what followed 47,458 insider open-market purchases of American stocks from January 2020 to August 2025.

A year after the purchase, the typical stock was up 2.36%. Whether that is good depends on what you compare it with. Against the median listed stock over the same windows, the purchases led by 2.56 points and 53% of them beat it. Against the S&P 500, they trailed by 12.95 points and only 37% beat it. Insiders mostly buy small companies, and over those years the median stock went nowhere while the S&P 500 returned 17.84% over a typical one-year window.

The timing added nothing. When we moved every purchase’s window six months later, as if the insider had bought long afterwards, the lead over the median stock was the same size: 2.78%, against 2.61% for the real dates. Insider buying marks a type of company, not a moment.

Bigger cheques did worse. The largest tenth of purchases, with a median of $3.53 million, trailed the smallest tenth by 17.1 points over a year. And a first purchase after two quiet years wasn’t special: 858 of them returned a median 0.74% over the next year, while the median S&P 500 member returned 7.50%.

For an index fund investor, the lesson is the benchmark. The same purchases look like a winning signal against the typical stock and a losing one against the index most of us own.

Has an insider purchase ever changed what you did with a holding?

The study: https://equibles.com/research/what-happens-after-an-insider-buys-evidence-from-47-458-open-market-purchases

Data: insider filings with the Securities and Exchange Commission and daily prices, processed by Equibles.