3 takeaways for investors tracking executive insider trades

New data shows significant insider sales for major Fortune 500 stocks including Nvidia, Tesla, and Fox Corp., among others, transactions that typically draw substantial interest from investors.

Nvidia insiders sold more than $1 billion worth of stock from June 2024 to June 2025, with Nvidia CEO Jensen Huang selling shares worth $42 million. Fox insiders are in selling mode, with a total of $1.165 billion in insider trades and more "sells" than "buys." Tesla insiders are taking the same path, with just short of $1 billion in insider trades, also with more "sells" than "buys."

It’s not only sellers. Insider buying is up, too. Take Eli Lilly where executives and board members recently snapped up millions in company shares after a recent market decline due to underwhelming drug trial data on the firm’s weight loss pill. Company CEO David Ricks bought over $1 million in Eli Lilly shares on his own.

3 factors to weigh with heavy insider trades

Tracking insider sales can be a smart move for investors, as it gives outsiders insight into potential market performance through the lens of (mostly) executives and board members. That doesn’t mean following insider trading trends to the letter, although some investors do so. It does mean gleaning useful information that gives investors insight into buying, selling, or holding shares of a stock.

While there are multiple reasons for company insiders to buy or sell stock, these factors typically come into play when executives and board members engage in accelerated insider trading.

1. The mindset inside the company may have shifted

“Heavy insider trading activity can mean that sentiment is changing among those who are most knowledgeable about a company,” said Paul Holmes, stock market analyst at New York City-based BrokerListings.com. “Clusters of buys can suggest insider confidence that the stock doesn’t necessarily reflect its fair value, while sales can show pessimism about the company’s strategy or future, or it’s simply profit-taking.”

Large insider buying also might mean that executives believe shares are undervalued or growth is coming that isn’t currently discounted in the price,” Holmes noted. “Sales might mean they think shares are more than fully priced or that they simply want liquidity. We know some insiders have plans set up where they sell automatically on a schedule.”

2. The trade is unique to the insider

Personal diversification or tax planning may be considered insider selling, and over-selling by the executives may indicate the same, said Olivier Wagner, a veteran trader and CEO at 1040 Abroad, a New York City-based financial services firm.

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“Although common sense dictates that selling should occur when insiders are doing the same, it’s not always the best approach,” Wagner said.

Such sales might occur because executives sell the stock for selfish reasons, like settling debts, rather than because of the company's poor performance. “For example, selling by a CEO after a personal fortune is not always indicative of the business's success,” Wagner noted. “That said, if there is an inclination towards insider selling during a time of financial uncertainty or a bad earnings announcement, it is likely a pointer to internal problems.

3. Buying might signal a genuine trend

Generally, insider selling doesn't mean much, as executives are compensated in stock and typically don't want a large portion of their net worth tied up in company stock.

“However, excessive insider buying is a strong signal that the executives have an insight based on their knowledge of their company operations and their industry that their stock is substantially undervalued and likely to appreciate in the near future,” said David Miller, co-founder and senior portfolio manager at Catalyst Funds. “There are many reasons that insiders sell, but only one reason they buy in a big way.”

Should investors closely track insider trades?

With the key impactors noted, conventional wisdom suggests that regular investors should sell when insiders cut bait, share-wise, but is that really a good idea? Not really, market experts say.

“No,” Miller said. “Many of the best performing stocks over the last decade have had consistent insider selling, not because their stock didn't have strong prospects, but rather because the executives at those firms had significant wealth tied up in company stock via compensation and were looking to diversify.”

Still, it never hurts to study up on what key company insiders are doing and what they may be thinking when buying and selling shares of their company.

“Investors can start by going to SEC.gov, insidermonkey.com, or insiderscore.com for insider buying and selling data,” Miller advised.

Additionally, investors can check out a fund that closely tracks insider trades. For instance, Catalysts’ Insider Income Fund (IIXAX) invests in short-term corporate bonds issued by companies where the CEOs and CFOs are doing insider buying, and it’s rated five stars by Morningstar.

If you do go forward and start monitoring insider company trades, focus on what matters.

“My process will exclude transactions that are automatic and only consider open-market purchases and unexpected sales,” said Matt Woodley, frequent trader and founder at International Money Transfer, a data-driven currency exchange platform. “When there’s a large number of insiders who have purchased just below a price bottom, it tends to relate to the timing, size of trade, and number of participants, which are trends that I follow.”

“Facts are helpful, but the advantage is made by pattern recognition,” Woodley added.

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