Most of the time when we see corporate insiders buying shares it is because the stock has declined, and the officers and directors are pretty sure they are getting a bargain price.
Often there is no specific news to near-term corporate plans or other events that trigger the purchase beyond valuation.
The stocks are cheap, and they are confident that the future will be bright enough to deliver returns of several multiples of their purchase price.
Corporate insiders are usually the epitome of patient long term value investors.
Every once in a while, we see insiders buy near new highs and that is when investors should really sit up and take notice.
The due diligence should be conducted with one finger on the buy button.
A fascinating academic paper titled Trading Against the Grain: Why Insiders Buy High and Sell Low digs into the behavior of corporate insiders and uncovers something most investors never think about.
Insiders, like the rest of us, are human. They fall prey to biases, particularly anchoring. A stock trading near its 52-week low looks cheap, and insiders are more likely to buy. A stock brushing up against its 52-week high looks expensive, and insiders are more likely to sell. The data confirms it: insider purchases cluster near lows and insider sales cluster near highs.
That sounds like disciplined, rational behavior.
But here is the twist. When insiders break that pattern, when they buy at a high price or sell at a low price, those trades turn out to be the most profitable signals.
That is when insiders are likely acting not on emotion but on information. The willingness to ignore the natural instinct to anchor decisions to the 52-week high or low is a tell that something real is going on behind the scenes.
The numbers back it up.
Insiders who buy when the stock is well above its 52-week low deliver returns that beat the market by more than 3 percent over the next 30 days.
Insiders who sell when the stock is far below its 52-week high see the stock underperform by about 1 percent in the same period. Stretch the time horizon out to 12 months and the effect gets even stronger.
A simple long, short strategy of "buy high and sell low" alongside these trades produces abnormal annual returns between 24 and 31 percent before transaction costs. That is remarkable in a world where professional managers fight for every extra basis point.
The study covers more than 30 years of data and finds that these patterns hold across executives, directors, and even large shareholders. Opportunistic insiders, the ones who trade irregularly and not on a set calendar, generate especially strong signals.
The message is consistent: when insiders go against the grain, investors and traders alike should pay attention.
What does this mean for us as outside investors? It means that not all insider trades are created equal. The routine buy near the bottom or sale near the top may simply reflect bias or liquidity needs. The trades that look foolish at first glance, the buys at a high or the sales at a low, are the ones most likely to contain real information about the future of the company.
Those are the trades worth tracking and, when possible, piggybacking.
Here are three stocks that have seen buy from insiders and large shareholders well above recent lows and just below 52 weeks high.
Hilltop Holdings (Ticker: HTH) is a Dallas based financial holding company that brings together banking, mortgage origination, and securities brokerage under one roof. Its PlainsCapital Bank unit is one of the largest independent banks in Texas, serving both businesses and consumers.
Prime Lending operates as a national retail mortgage originator with a focus on purchase mortgages. Hilltop Securities and its Momentum Independent Network form a full-service broker dealer platform with investment banking, advisory, and clearing services.
Management has been clear that the banking operation is intended to be the foundation of the business over the long term, with the mortgage and securities businesses providing diversification and cyclical balance. In August 2025, insider activity brought renewed attention to the stock. Jonathan Sobel, who is both a director and the chairman of Hilltop Securities, stepped in to buy 30,000 shares in open market transactions at prices ranging from about 32.92 to 33.19. After these purchases his beneficial ownership rose to roughly 87,429 shares.
This is a meaningful show of confidence in the company's prospects. Buying near the highs may be a sign that positive developments are on the way shortly.
Valvoline (Ticker: VVV) has become a pure play automotive services business after the separation from its legacy lubricants manufacturing business. Today it operates and franchises Valvoline Instant Oil Change and Great Canadian Oil Change, along with supporting independent Express Care locations. The company has leaned heavily into a stay in your car, quick service model that emphasizes speed and convenience for oil changes, battery replacement, bulbs, wipers, and light tire services.
As of fiscal 2025, the system counted approximately 2,100 service center locations, making Valvoline one of the largest quick lube operators in North America. Insiders have been active here as well.
In August 2025, newly appointed CFO J. Kevin Willis bought 12,725 shares in open market transactions at prices just under 39.50 per share. Willis, who took over as CFO in May 2025, has put his own capital to work early in his tenure at prices closer to the highs than then lows, which investors are a potentially positive signal.
Republic Services (Ticker: RSG) is one of the nation's leading environmental services providers. Its core Recycling and Waste segment covers residential and commercial collection, transfer stations, recycling facilities, and a large landfill network.
Beyond the core, the company has been building a substantial Environmental Solutions segment. This platform was expanded significantly with the 2022 acquisition of US Ecology, which added hazardous and non-hazardous waste treatment, industrial services, and emergency response capabilities.
The business now offers a vertically integrated solution for municipalities, corporations, and institutions that need both traditional waste handling and specialized disposal. There is positive insider activity has continued here as well, led by Cascade Investment, the Bill Gates investment vehicle, and a 10 percent owner. In August 2025, Cascade picked up an additional 4,258 shares at an average price of about 234.91 per share.
