One of the most reliable contrarian signals in the markets is insider buying. Executives and directors might sell stock for any number of reasons: taxes, diversification, or simple lifestyle spending. But they buy for just one reason. They believe the price will rise. In energy, where cycles are long, brutal, and equally rewarding, insider buying by top executives has consistently marked turning points. Looking back across the past 40 years, the pattern is remarkably consistent. When the CEOs and CFOs of oil, gas, and pipeline companies have opened their wallets, investors willing to follow have been rewarded with outsized gains.
The Template: Late 1980s and Early 1990s
The late 1980s and early 1990s set the template. Oil collapsed in 1986, wiping out fortunes and sending stocks into a tailspin. Executives across the oil patch stepped in, buying their own shares at distressed prices. These purchases were not timid token gestures. They were heavy, concentrated bets at the very bottom of the cycle. When crude rebounded the following year, the stocks followed. Academic work at the time confirmed what the market could see: insiders, particularly top officers, had a real edge. Their purchases foreshadowed positive abnormal returns in the months and years that followed.
The 1990s: Reinforcing the Lesson
The 1990s reinforced the lesson. When oil slipped under $11 a barrel in 1998, insider buying in exploration and production companies surged. CEOs and CFOs in the shale basins and onshore drillers bought into despair. Within 2 years, as crude doubled, they reaped the rewards. The regulatory landscape also changed. The Sarbanes-Oxley Act of 2002 forced insiders to disclose their trades within 2 days, which meant the market began reacting more quickly to those signals. Stocks that saw CEO or CFO purchases often rallied within days of the filing, a dynamic that persists today.
Mid-2000s: Dramatic Examples
The mid-2000s gave us some of the most dramatic examples. In 2008, when oil spiked above $140 and refiner stocks were crushed, insiders at 10 refining companies staged their largest buying spree in nearly a decade. They knew that margins would expand when crude broke. Within months, as oil collapsed in the global financial crisis, their foresight paid off handsomely. When the crisis itself hit, insiders across the energy sector turned into the only aggressive buyers left in the market. From oilfield service names to E&Ps, they bought while the rest of the world was selling. By 2009, energy stocks were among the strongest rebounders.
The 2014-2016 Shale Bust: Another Textbook Case
The 2014-2016 shale bust was another textbook case. Oil’s collapse from $100 to $30 a barrel devastated the sector. Midstream partnerships, once market darlings, traded as if bankruptcy was imminent. At precisely that moment, insiders at Crestwood, Energy Transfer, Summit Midstream, and Plains GP bought millions of shares. The scale of those buys was staggering. Kelcy Warren of Energy Transfer alone poured tens of millions into his company’s stock. When the panic passed, those units doubled, and the insiders who bought at the bottom were vindicated.
2020: Historic Opportunity
Then came 2020. COVID lockdowns drove oil demand into the ground, and prices briefly turned negative. Energy equities hit lows not seen in decades. It was a moment of despair. Insiders saw it as opportunity. In March 2020, energy executives bought stock at a ratio of 11 to 1 against sellers. CFOs and CEOs across E&P and midstream alike stepped up. What followed was historic: energy went from the worst-performing sector in 2020 to the best in 2021. Exploration companies doubled and tripled. Midstream operators delivered 30% returns on top of double-digit yields. The men and women running those businesses had been buying while the world was panicking, and their confidence was rewarded.
Emerging Themes and Patterns
Across these decades, several themes emerge. Insider buying is strongest and most predictive when it clusters, when multiple top officers buy at the same time. CFO purchases have proven especially powerful, often outpacing CEO buys by several percentage points over the next year. In E&P companies, insider buying has coincided with commodity troughs and foreshadowed explosive rebounds. In midstream, where the business is steadier, insider purchases have been rarer but even more telling. When pipeline executives buy, it is usually because yields have spiked to unsustainable levels, and those trades have consistently been followed by steady, income-rich gains.
The Historical Numbers
The historical numbers bear it out. Insider-purchase portfolios across industries have produced abnormal returns of 6% to 8% per year, and energy insiders have repeatedly beaten even that. In 2009, 2016, and 2021, the years following the largest insider-buying waves, energy indexes outperformed the S&P 500 by wide margins. E&P portfolios posted gains of 40% or more. Midstream funds delivered double-digit total returns with income as the anchor. Investors who had the courage to follow the insiders were paid handsomely.
The Bottom Line
40 years of evidence lead to one conclusion: when the oilmen buy, investors should pay attention. The executives closest to the assets, the balance sheets, and the cash flows have shown time and again that they know when their companies are undervalued. Whether it is a CFO in Houston loading up on shares after a brutal quarter or a founder of a pipeline partnership writing a personal check at the bottom of a panic, those transactions have been some of the clearest and most profitable signals the market offers. In the cyclical, volatile world of energy, insider buying remains one of the few guides you can trust.
Current Activity: Recent Insider Buying Signals
In recent months, several energy and minerals companies have stood out not just in market action but in executive behavior. Their CEOs, directors, or CFOs have been buying hands-on in ways that reinforce the broader pattern: insiders leading the way out of volatility. These are not fringe plays. Some are royalty and mineral firms, others midstream, others coal, but all show strength of conviction.
Alpha Metallurgical Resources (Ticker: AMR): Kenneth S. Courtis, one of its directors, has purchased over $16 million worth of shares in AMR in the past 24 months, including approximately 53,000 shares in mid-September 2025, bringing up his ownership materially. AMR insiders now own approximately 16% of outstanding stock. For a coal and energy-minerals name, that is a loud signal, one that suggests management believes margins, prices, or demand may be turning upward even in what many see as a sector in structural pressure.
Black Stone Minerals (Ticker: BSM): CEO and Chairman Thomas L. Carter Jr. has executed a series of open-market purchases in early September 2025: 25,370 units over 3 days, at prices in the $12.00 to $12.40 range. After the trades, he holds approximately 3.5 million units directly, besides large indirect holdings. As a royalties and minerals company, BSM is not burdened by drilling risk. Thus when the CEO himself buys, it tends to reflect confidence that production by third parties and commodity prices will deliver returns via royalty flows.
Dorchester Minerals (Ticker: DMLP): Director Frank Damon Box and CEO Bradley J. Ehrman have made smaller but still meaningful purchases. Box bought approximately $100,000 in early September, Ehrman earlier in the year. Insider ownership is about 5% to 6%. For DMLP, which owns royalty, mineral, and net profits interests across many producing regions, these purchases suggest that insiders expect stability or upside in operator production or commodity tailwinds.
NGL Energy Partners (Ticker: NGL): Director James M. Collingsworth bought 100,000 common units (approximately $580,000) in mid-September, boosting his direct stake to approximately 730,000 units, at prices near $5.80 per unit. This follows an approximately 40% share price rise over the last year. That level of insider buy, by a director in a company with multiple business lines including crude logistics, blending, and water, is a strong vote of confidence even in an environment where earnings surprises have been mixed.
