Insider Buying Trends by Sector: Where Executives Are Putting Their Money
Analysis of insider buying patterns across market sectors. Find out which industries see the most executive confidence and what it means for investors.
I've been tracking insider trades for years now. After processing over 50,000 Form 4 filings through Earnings Feed, one thing became obvious: insider buying is not evenly distributed across the market.
Some sectors are full of executives who routinely buy their own stock. Others almost never see open-market purchases, even when those companies are crushing it. The same Form 4 can mean very different things depending on where it appears.
This isn't just trivia. If you don't understand sector context, you'll overreact to routine bank CEO purchases and completely miss the rare tech executive buy that actually matters.
The Data: Where Insider Buying Actually Happens
When I filter for true open-market purchases (the P-code trades where someone actually chose to spend their own money), a few sectors dominate every time.
Financials: Banks and the Culture of "Skin in the Game"
Bank executives buy their own stock constantly. It's not even close.
In our data, financial companies account for roughly 30-35% of all open-market insider purchases by dollar volume. Part of this is cultural. Bank CEOs are expected to have substantial personal stakes. Boards watch it. Regulators watch it. Investors ask about it on earnings calls.
But there's a structural reason too. Banks are volatile in ways that create buying opportunities. A regulatory scare or a single credit headline can knock a stock down 30% in a week without changing the long-term earnings power much. Insiders who know the balance sheet will buy into those dips.
You see it most clearly during panics. Regional bank stress in early 2023. The SVB fallout. Every time, the Form 4 feed fills up with familiar names: CEOs, CFOs, directors all stepping in.
I'll be honest: most of these buys aren't surprising anymore. They're almost expected. That's useful information too.
Energy: Cycles, Conviction, and Generational Ties
Energy is the other heavy hitter, especially oil and gas.
The commodity price sets the rhythm here. When oil collapses, stock prices follow. Insiders who've lived through multiple cycles see these drawdowns differently than the market does. A 50% drop feels less like a warning and more like a sale.
Many energy executives also have multi-generational ties to their companies. Their networks, reputations, and family wealth are wrapped up in these businesses. When they buy after a commodity slump, they're not making a trade. They're expressing a view on the whole cycle.
The most interesting periods are the ugly ones. Oil crashes. Geopolitical shocks. That's when you see clusters of purchases from people who've seen this movie before.
Healthcare and Biotech: Spiky and Event-Driven
Healthcare is really two different worlds.
Big pharma behaves like any large-cap: modest, predictable insider activity. But biotech? Biotech is chaos.
Biotech executives live and die by binary events. Trial readouts. FDA decisions. Partnership announcements. The stock can double or halve on a single press release. Because of that, insider buying tends to be sporadic but intense. Nothing for months, then a sudden burst.
Founders feature heavily here. Many come from scientific backgrounds, not finance. They think in terms of "this drug works" or "this mechanism makes sense" rather than quarterly guidance. When they buy, it's usually because they believe their science is being mispriced.
The signal is noisy. Plenty of biotech insiders are just too optimistic about their own molecules. But in aggregate, the sector produces some of the most dramatic "betting on ourselves" activity in the market.
Industrials: Quiet Accumulation
Traditional industrials don't make headlines for insider buying. But if you look at the data, there's a steady trickle.
These are often companies with long histories, family involvement, or cultures where management has grown up inside the organization over decades. The people running them know the order book and customer relationships in their sleep. When the economic cycle turns down and the market dumps anything cyclical, these insiders sometimes buy into the gloom.
You don't see dramatic spikes. You see counter-cyclical nibbling. More buying when PMI numbers roll over. Less when everything looks rosy.
Where Insider Buying Is Rare (And Why That Matters)
Some sectors barely register any open-market buying. When it does happen, pay attention.
Large-Cap Tech: Already Rich, Why Bother?
This surprises people at first. Big tech has minted fortunes. But almost none of that wealth came from executives buying stock in the open market. It came from grants, options, and early-stage ownership.
By the time a tech company is large and public, the senior team already sits on huge equity stakes. They're thinking about diversification, not adding more of the same name. Pay packages are already heavily weighted toward stock, so writing a personal check to buy more feels redundant.
There's also the valuation problem. These names often trade at multiples that make even believers hesitant to add with their own cash.
That's exactly why any genuine open-market buying in large-cap tech stands out. It doesn't happen often. When it does, people notice.
Consumer Discretionary: High Turnover, Low Conviction
Retailers, travel companies, restaurants. These businesses are at the mercy of fickle consumer tastes and macro conditions.
Executive turnover is high. Pay structures mix cash and stock in ways that don't encourage long-term ownership. The culture is less "we own this for life" and more "we hit our numbers this season."
Insider buying happens in turnaround stories or activist situations where new management wants to signal alignment. But as a background pattern, it's not persistent.
Utilities and Staples: Quiet by Design
Regulated utilities and consumer staples almost always sit at the bottom of insider-buying charts.
There's a structural reason: the upside is deliberately limited. Utilities earn regulated returns. Staples sell steady volumes in mature categories. Investors care about dividends and stability, not growth. Insiders feel the same way.
When a utility CEO does buy a sizable amount in the open market, it's memorable precisely because it's rare. A single Form 4 can carry as much weight as a dozen small buys from bank directors.
Why Do Sectors Behave So Differently?
A few concrete forces shape these patterns.
Compensation structures vary wildly. A bank CEO who climbed the ranks internally may have accumulated stock gradually and still feels pressure to demonstrate commitment. A Silicon Valley executive hired with a front-loaded equity grant worth tens of millions may find an extra $200k purchase pointless.
Volatility creates opportunity. Sectors that swing 30-50% on macro headlines give insiders more moments to think "this is stupid, I know the business better than this." Stable sectors just don't create those openings.
Valuation levels matter. If an industry trades at low multiples, buying on further dips feels reasonable. In sectors that trade at nosebleed valuations, the bar for "this is cheap enough" is much higher.
Culture is real. In banking, owning your own stock is part of the job. In some family-influenced industrials, it's a matter of pride. In big tech, the expectation is "let your grants do the work."
Timing Patterns Worth Knowing
Post-Earnings Windows
Executives are typically blacked out for a few weeks around quarterly results. You often see buying blips right after earnings, once the window opens. If a stock just got punished for a miss that management thinks is fixable, that post-earnings period can be especially active.
Sector Crises
The most dramatic activity clusters around sector-wide stress.
Banking panics. Oil crashes. The 2022 tech correction. In each case, insiders who live and breathe a sector start to see the market's fear as excessive and act on it.
These cluster patterns are more interesting to me than individual trades. One bank CEO buying is a data point. Five regional bank CEOs buying in the same week is a signal.
Calendar Effects
Year-end tax planning, post-bonus buying, and 10b5-1 plan refreshes create some seasonality. December and January often show slightly higher activity. Don't read too much into every December Form 4.
What "Strong" Looks Like in Different Sectors
The same trade carries different weight depending on context.
A bank CEO buying a million dollars of stock is worth attention but not shocking. Seven-figure bank trades happen regularly during rough markets. You'd give extra credit if other executives joined in or if the timing lined up with particularly scary headlines.
In energy, a wave of buying when crude is in the gutter is a classic contrarian tell. The logic: "These people have lived through enough cycles to know when things are being marked down too far."
In biotech, a founder buying ahead of an FDA decision draws attention. But a CEO buying after a disappointing trial, when the stock has already cratered, can be an even stronger statement.
In large-cap tech, almost any true open-market purchase feels like news. The absence of a pattern makes a single act stand out.
You're always comparing the trade to what's normal for that sector, not just reacting to the dollar amount.
Quick Reference: Insider Buying by Sector
| Sector | Typical Buying | Why | What Stands Out |
|---|---|---|---|
| Financials | High | Culture of ownership; volatile drawdowns | Cluster buying during panics |
| Energy | High | Cyclical conviction; generational ties | Purchases after commodity crashes |
| Biotech | Spiky | Binary events; founders bet on science | Buying after failed trials |
| Industrials | Moderate | Long tenures; counter-cyclical mindset | Quiet accumulation during downturns |
| Large-Cap Tech | Rare | Grants dominate; already equity-rich | Any open-market buy stands out |
| Consumer Discretionary | Low | High turnover; trend-driven | Turnaround and activist plays |
| Utilities/Staples | Very Low | Limited upside by design | A single buy is a real signal |
How I Use This
When a new Form 4 comes through, I ask a few questions:
Is this kind of buying common where this company lives? A financial or energy name with regular insider accumulation is behaving on script. A sleepy utility with a sudden CEO purchase is not.
How does it compare to recent sector activity? Are lots of regional banks seeing insider buying after a macro scare? Does a single industrial stand out as an outlier? Are tech executives starting to buy across multiple companies after a brutal drawdown?
What's the setup? Is this happening during a sector panic or in the middle of a calm period? Cluster buying after a scare feels very different from routine purchases in quiet markets.
Seen this way, insider data stops being a random stream of names and numbers. It becomes one more way to take the market's temperature.
Track Insider Buying by Sector
If you want to systematically monitor where insiders are putting their money:
- Create a free Earnings Feed account
- Build sector-focused watchlists
- Use the insider feed to see which industries are attracting insider money right now
The filings are public. Sector context is what turns them from trivia into something useful.