Corporate Insiders Buying Stock Dip at Fastest Pace Since May

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Corporate Insiders Buying Stock Dip at Fastest Pace Since May.

stock :: 2025-11-20 :: source - bloomberg

By Geoffrey Morgan

(Bloomberg) -- The worst run for stocks since April has sparked a buying spree among one of the markets’ most informed cohort: corporate insiders.

Executives at publicly listed companies bought shares in their own firms over the past 30 days at the fastest clip since May, stepping in as fears of an AI-bubble sparked a broad rotation out of highly valued tech stocks into more defensive pockets. As a result, the ratio of insiders buying to selling is up to 0.5, data compiled by the Washington Service show.

Source: The Washington ServiceSource: The Washington Service

Earlier this year, corporate insiders managed to time the April selloff correctly, buying their own shares at the fastest clip since 2023 after US President Donald Trump unveiled sweeping new tariff policies. Those purchases preceded the market’s recovery — including the biggest one-day rally since the 1980s — before buying activity dropped as the market headed toward a parade of fresh records beginning at the end of the second quarter.

Trading desks have essentially endorsed the executives’ confidence, with JPMorgan Chase & Co.’s calling the S&P 500’s drop a “technical washout” that provides an opportunity for investors to add to equity positions. The 500-member closed 0.4% higher on Wednesday in the first rally in four days. Sentiment improved further after the bell when Nvidia Corp. gave a strong revenue forecast for the current period, mitigating concern that a surge in AI spending is poised to fizzle.

Still, the S&P 500 is down 2.9% this month and is heading for its worst November since 2008.

One reason why investors are willing to buy the dip is that corporate profits for third-quarter reporting season largely beat Wall Street expectations, with profits “running at their highest levels” on record, said Matt Lloyd, chief investment strategist at Advisors Asset Management Inc.

Insider buying at the tail end of that period adds some additional investor confidence to the outlook for corporate America.

“Insiders are in a pretty good seat to assess the outlook for a company,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. “Insiders can look at their company through rose-tinted glasses, but net insider purchases can be a bullish signal.”

To be sure, while insiders know their own companies well, they “don’t necessarily know the stock market extremely well,” so insider purchases can’t necessarily be relied on from a market timing perspective, said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

Net purchases, however, are a positive sentiment indicator.

“There’s lots of reasons for insiders to sell, whether that’s diversification, or whether that’s in order to pay taxes or for cash flow needs, but there’s really only one reason an insider would ever buy their own stock, and that’s because they truly believe it’s undervalued,” Zaccarelli said.