Insider buying in stocks can be one of the most obvious signs (under the right circumstances) that a stock is undervalued and is ready to break out.
When company executives or other insiders use their own money to buy shares, they’re putting real skin in the game. They’re not guessing. They already know how the business is performing today and what’s likely coming next.
Insider purchases are legally required to be disclosed and anyone can track insider buying for free.
This article shows you exactly how you can track insider buying specifically to find stocks that can outperform.
Let’s dive in!
What Is Insider Buying?
Insider buying refers to corporate executives, directors, or major shareholders (owning 10% or more of the stock) purchasing shares in their own company. Company insiders include:
- Executives: The CEO, CFO, COO, or other top “C-Suite” leaders at a company.
- Board of Director members: Any Director who sits on the company’s board of directors. These are generally experienced business leaders who offer strategic guidance for companies.
- Big shareholders: Anyone who owns more than 10% of the company’s stock.
- Employees with inside info: People who have access to key non-public information. This is the least obvious to track, and won’t typically appear on most Insider Trading trackers.
These trades are fully legal as long as it’s disclosed properly. It’s actually fairly common, because you’d expect a company’s executives to buy more shares if they believe in the business.
The U.S. Securities and Exchange Commission (SEC) requires insiders to file a Form 4 within two business days of any transaction, giving investors near real-time visibility into what insiders are doing with their money.
Sites like TIKR and a handful of others track new Form 4 filings and show you which stocks are seeing insider buying, which makes it easier for you to find stocks that might see a breakout.
See which breakout-worthy stocks have high insider buying today with TIKR (It’s free) >>>
Why Insider Buying Can Predict Stock Breakouts
When insiders buy shares with their own money, they’re usually only buying because they believe the market is severely underestimating the company’s stock.
Breakouts often begin quietly, before there’s any kind of news or headlines surrounding the company. That’s why insider buying near the bottom, especially after bad earnings, negative sentiment, or steep selloffs, can be one of the clearest signs that a turnaround is coming.
Some of the most powerful patterns that can signal a breakout include:
- Large insider buys after a big drop (trades over $500K are particularly noteworthy)
- Multiple insiders buying within days of each other (known as cluster buying)
- Insider buying following weak earnings or bearish analyst sentiment
These patterns show that the people closest to the business believe the market has overreacted and that the stock is about to turn.
Each of these patterns on its own is worth tracking. But when you’re seeing multiple of these patterns, or hedge funds and insiders are both buying, that can be a really strong sign that the smart money really thinks the stock is undervalued.
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Real-World Examples
Insider buying has marked the bottom, and the start of powerful breakouts, in many major stocks.
Here are two clear, recent examples:
Example 1: Salesforce (2025)
In April 2025, Salesforce board member Oscar Munoz purchased $1 million worth of shares (~3,882 shares at ~$257 each) in the open market, right after the stock dipped about 6%, dragging shares down close to a recent low.
Munoz is known for well-timed insider buys (including a $500K purchase in June 2024 that later gained ~50%).
Following his latest purchase, Salesforce rebounded sharply, which made this a textbook example of insider buying signaling a potential upside before the broader market caught on.
Example 2: Pinterest (2022)
In early November 2022, Pinterest’s stock had fallen more than 75% from its highs. The market had turned sour on social media platforms, and investors were questioning its growth story.
That’s when CEO Bill Ready made a bold move: he purchased $5 million worth of shares on the open market. It was his first major buy as CEO and a clear signal of confidence in the company’s long-term outlook.
Within a few months, Pinterest rebounded sharply, rising over 40% by early 2023 and achieving returns of over 100% at the stock’s peak. Ready’s timing gave investors a rare glimpse of insider conviction at the bottom.
See which high-upside stocks have high insider buying today with TIKR (It’s free) >>>
How to Track Insider Buying That Can Lead to a Stock Breakout
If you’re already researching a stock and wondering whether insiders are buying, TIKR makes it easy to check.
Here’s how to use it to spot potential breakout setups backed by insider conviction:
Go to the stock’s page on TIKR and click the Ownership and navigate to the Insider Transactions tab
There, you can see all the recent buys and sells of different insiders. This makes it easy to follow the smart money.
Example: As an example, with Dollar Tree (DLTR), Officer Aditya Maheshwari purchased 610 shares at $98.20 on June 18, 2025, and Officer Stewart Glendinning bought 13,000 shares at $72.83 back on April 15, 2025.
These open-market buys from senior leadership, especially Glendinning’s sizable $946K purchase from April, can signal insider confidence in the business.
These are some of the important things to take a closer look at:
- Check the date and context of the purchases:
- Did purchases happen after a big drop or bad earnings?
- Are they recent enough to still reflect the current valuation?
- Look for role and size of the buyer:
- Large buys from the CEO, CFO, or multiple directors carry more weight than low-level trades
- Evaluate the trend:
- Are there multiple purchases close together?
- Are insiders adding to positions rather than selling?
TIKR helps you validate whether insider buying lines up with a breakout thesis you’re building. It won’t surface every stock with insider activity across the market, but once you’re interested in a company, TIKR tells you everything you need to know about how the people running it are acting.
Create your free account at TIKR.com and start following what the smartest money is doing, before everyone else catches on.
See how you can find the best stocks to buy today with TIKR’s Insider Trading tool (It’s free!) >>>
TIKR Takeaway
Tracking insider buying can be a powerful way to find stocks that have the potential to breakout.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks, so if you’re looking to find the best stocks to buy for your portfolio, you’ll want to use TIKR!
TIKR offers institutional-quality research for investors who think of buying stocks as buying a piece of a business.
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FAQ Section:
1. What is insider buying?
Insider buying happens when a company’s executive, director, or large shareholder purchases shares of their own company using personal funds. These trades are disclosed publicly via SEC Form 4 within two business days.
2. Why does insider buying work as a signal?
Because insiders have access to real-time company performance, they’re often in the best position to recognize when the market is undervaluing the business. When they buy with their own money, it shows real confidence, and that can precede a breakout.
3. How much insider buying is considered meaningful?
Large, open market purchases from senior executives, especially $500K or more, tend to be the most meaningful. Cluster buying, where multiple insiders buy around the same time, is also a strong signal that something positive may be coming.
4. What insider activity should I ignore?
Avoid focusing on insider sales, option exercises, or trades made through 10b5-1 plans. These actions often have little to do with the company’s outlook and don’t reflect real conviction.
5. How do I know when to act on insider buying?
Look for patterns: large buys after a sharp decline, cluster buying within a short time frame, and purchases by CEOs or CFOs. When those align, and the fundamentals support it, it’s often a good time to dig deeper or consider a position.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
