Jul 4, 2022
Bear markets are noisy and volatile. It’s difficult for investors to cut through the noise, find the right signals and discover good opportunities.
One of the clearest signals is insider trading activity. When the senior directors, founders, and large shareholders of a corporation buy or sell shares, it could be a signal of underlying strength or weakness.
Advertisement
Some studies have found that net insider activity in any month is positively correlated with stock price action over the subsequent two months.
Thanks for subscribing!
Read the best of Moneywise in 5 minutes or less.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
Put simply, insiders buying more shares of their own company is a green flag. Here’s a look at the companies with the heaviest insider buying activity in recent months.
Don’t miss
- Mitt Romney says a billionaire tax will trigger demand for these two physical assets — get in now before the super-rich swarm
- Stocks are down, but “cash is not a safe investment,” says Ray Dalio — get creative to find strong returns
- Warren Buffett likes these 2 investment opportunities outside of the stock market
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Occidental Petroleum
Energy stocks have outperformed nearly every other asset on the market this year. However, the sector has lost momentum in recent weeks. Crude oil lost over 20% of its value, dipping energy stocks into an official bear market.
Insiders at Occidental Petroleum (OXY) see this dip as an opportunity. Of the 22 total insider trades over the past three months, 16 were insider purchases. On net, insiders purchased more than 17 million shares of the company during this quarter.
Senior directors Christopher Champion and Vicky Bailey were net buyers during this quarter. But the biggest transactions came from key shareholder Berkshire Hathaway (BRK). Warren Buffett has been aggressively accumulating this position since the start of the year.
The fact that insiders and the world’s most successful investor are buying this stock at the same time is a clear indication of underlying value.
Fiserv
Insiders have been aggressively buying shares of financial technology company Fiserv (FISV). The stock has been beaten down along with the rest of the FinTech sector. However, it has outperformed its peers. It’s down just 17% year to date, compared to the Nasdaq’s 30% plunge over the same period.
Now, insiders see more room for growth ahead. Over the past three months, insiders completed 14 purchase transactions for a net of 1.63 million shares. Senior directors Guy Chiarello and Doyle Simons were net buyers, but the biggest transactions were executed by investment company Valueact Holdings, L.P.
Gitlab
Software platform Gitlab (GTLB) has lost 60% of its value since November last year. It’s been caught in the ongoing tech bear market. However, the company’s software package could see robust demand as corporations try to automate processes and improve efficiency during a downturn.
This is why the management team expects topline growth of 58% this year. Meanwhile, gross margins are as high as 90%. Put simply, the company is in a strong position to sustain its growth strategy despite the economic headwinds ahead.
GitLab’s management team is certainly confident about its prospects. They’ve been aggressively buying shares of the company. Insiders purchased 18 million shares across 15 transactions in the past three months. C-suite executives like Michael Mcbride, Robin Schulman, and Dale Brown were buying during this quarter.
Seed investor Khosla Ventures Seed C, L.P also raised its stake in the company. The venture capitalist team now owns more than 10% of GitLab’s outstanding shares.
What to read next
- Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
- Too many Americans are still missing out on cheaper car insurance
- How to turn your spare change into a diversified portfolio
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
