Michael Brush

Thu, Jun 12, 2025, 3:21 PM7 min read

Hedge-fund managers are supposedly the smart money, so investors love to turn to them for stock ideas. But tracking company insiders is a better way to go; they’re the “smartest money,” says Bank of America strategist Savita Subramanian.

Insiders are particularly worth following coming out of big market selloffs like the one we just went through. “During the last period of systemically stressed markets (2008 to 2010) our insider-buying strategy drove 19 percentage points of annualized alpha,” Subramanian wrote in a recent research note.

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“Alpha” means outperformance. So that’s a fancy way of saying Bank of America’s highest-ranked insider stocks knocked the lights out.

Thanks to U.S. securities laws, insiders have to reveal their buying activities to the public in almost real time. There are many ways to refine the insider signal in these filings. Personally, I favor purchases by insiders with good track records, and buys by C-suite managers who are closer to the business than directors. Cluster buys by groups of insiders enhance the signal.

Bank of America uses a simpler approach that can still be effective. It ranks companies by the number of shares bought in the past three months as a percentage of the float. Below are the top four names that rank the highest for insider buying and insider selling, using this approach. I also lay out the bullish trends that explain the insider buying — and why these stocks still look quite cheap.

1. Wynn Resorts (WYNN): Wynn Resorts WYNN operates the Wynn Las Vegas, Encore Las Vegas and Encore Boston Harbor casinos. Overseas, it owns Wynn Macau and Wynn Palace in Macau in China. The company should post growth by expanding via the construction of the Wynn Al Marjan Island in the United Arab Emirates. Improved consumer confidence as recession and tariff fears ease will also help sales growth.

The insider activity: Since February 18, Wynn insiders have purchased an enormous $31.5 million worth of stock at $67.62 to $92.44. Most of the buying was from billionaire and seasoned entertainment-sector investor Tilman Fertitta through his firm Fertitta Entertainment. Fertitta owns the Houston Rockets NBA team, and he is no stranger to the gaming sector — he owns several Golden Nugget casinos. Though he does not work for Wynn, Fertitta is considered an insider because he owns a large stake. These insiders are called beneficial owners. Actual insiders are buying, too: Two directors bought $2.2 million worth of stock in February.