When Insiders Stop Buying, Should You Worry?

The insider buy-to-sell ratio in the US market measures the volume of shares purchased by corporate insiders relative to the number of shares they sell. A ratio above 1 indicates that insiders are buying more than they are selling, often signaling confidence in future stock performance or identifying undervalued opportunities. Historically, spikes in this ratio have coincided with market dislocations, most notably during the 2020 correction and, to a lesser extent, in 2022. However, current trends show a decline in insider buying activity. As of April 1, the ratio stands at 0.32, well below its historical average. This subdued level suggests a more cautious stance among insiders and a notable slowdown in share accumulation, potentially reflecting uncertainty about near-term market direction.

Source: Guru Focus, The Business Week GraphicThis graph was produced by Lucas Juery, CFA, CFPⓇ and is not intended to provide financial advice.