Insiders who are expected to be more knowledgeable with the overall affairs of the firm, such as chairmen of the boards of directors or officer-directors, are more successful predictors of future abnormal stock price changes than officers or shareholders alone.
H. Nejat Seyhun
We are pleased to share our latest white paper, The Insider Investment Factor. This research builds on decades of empirical evidence suggesting that when corporate insiders buy their own stock, or when companies buy back shares, these signals can indicate undervaluation and potential excess returns.
The paper revisits well-known academic work and introduces proprietary findings from over 12,000 insider purchase transactions spanning 26 years. The results suggest that buying alongside company executives, especially when supported by favorable valuation metrics, may help tilt the odds in investors’ favor.
Read the full paper to explore the data, the studies, and the nuanced role that insider conviction can play in long-term value investing.
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