Note: The difference between the average of all insider buys vs. the median return. This suggests that well over half of the insiders performed better than the median of 14.95%.
Our research shows unequivocally you can. Over the last 12 months we tracked 421 insiders that bought $100,000 or more of their company’s stock. We omitted from this 10% owners as we view them more like hedge funds than true insiders. We dont’ look at numbers less than $100,000 because that can be window dressing, simply execs trying to pump up investor confidence.
The average return on these insider buys was 19.80%. The median return was 14.95%. The best return was 285.2% and the worst was -61.77%. This is a volatile strategy though as the standard deviation was 37.72%. During the same time period the S&P 500 Total Return was 9.85%. Following insiders indeed can be a gratifying strategy.