Are Insiders Signaling a Bottom for This Sector?

This year has been as volatile as we predicted during our roundtable in January.
Severe daily chop, recession concerns, government agency concerns, debt concerns, budget concerns… egg prices.
The list is never-ending.
One week the tech sector is on fire… the next week it’s industrials… and then it’s back to tech… and then the fixed income sector tanks.
It’s been one thing after another. And although we may have a new administration, the market is the same old market – unpredictable!
But for certain traders – this environment is GREAT.
In fact, my partner Bryan Bottarelli has racked up a ton of winners already this year.
For example, yesterday he closed CVS for a 66% gain and a 59% winner on the SPY – all in less than 1 trading day.
But for investors who use tried-and-true strategies, it’s been a challenge.
Despite those challenges, there’s still one strategy that I’m focusing more and more on: cluster buying. And right now – there’s one key sector insiders are pouring into.
Cluster buying is when several company insiders (at least two officers and three total buyers) buy a significant amount of their company’s shares on the open market. I am talking millions of dollars’ worth of shares.
This type of trading signifies that they have enormous confidence in the future of the company.
The thinking behind my cluster buying strategy is that insiders have intimate knowledge of what is happening at their company from day to day. They know about deals that are coming down the pike. They know what big things are in the offing.
Investors will often notice that investing in stocks based on insider buying doesn’t seem to be working in the short-term. So should you dump and move on? My answer is a resounding NO!
This strategy often takes months to fully play out.
And that’s because when insiders buy, they are not allowed to sell for at least six months. In fact many don’t sell for years.
You see.. insiders are not buying shares today based on the expectation that they will trade out of them in a week or a month. When the market was rocking, investors could make that bet, buying when insiders bought and selling on the pop that almost always followed.
Now we are back to the traditional form of insider investing. Insiders are buying because…
- They think the shares are cheap.
- They think the shares are going higher in the long term.
But the long term is not a day or a week later. It could be months later.
It’s not the insiders who need to adjust their expectations – it’s us, the outsiders!
Right now, Insiders are buying in one particular beaten down sector: Energy.
There have been some massive purchases in three stocks in particular: Tidewater (TDW), Transocean (RIG) and Helmerich & Payne (HP).
As a follower of insider stocks, when insiders at three companies in one sector spend millions of dollars of their own money in the open market, I pay attention. So should you!
YOUR ACTION PLAN
Following insider buying is one of the best ways to find potential winning buy opportunities.
And speaking of insiders, I have an exciting announcement for next week.
Gold is RED HOT right now, and I just arranged for a CEO of a major, publicly-traded metals company to appear in our next Catalyst Cashouts LIVE session.
This “Secret CEO” will be joining us on Tuesday, February 18th at 2 p.m. EST – and you’re invited to join us.
If you’ve ever wanted to livestream with a CEO of a major, publicly-traded company – and ask questions live – then here’s your chance!
Best of all – you can get access to this event – plus 3 other Cashouts livestreams – all for just $4. Lock in your spot now!
Click here to sign up for Cashouts for $4 and get access to 3 weekly livestreams.
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