Market signals are tough to follow because they often fail to deliver their promises. For example, despite their insider activity, the three stocks on this list are all quality buys. In two cases, the insiders are buying, as would be expected. However, in the third, the insiders are selling despite analysts and institutions indicating that its share price will soon skyrocket.
RLI Corporation Insiders Buy for the First Time in Years
RLI Corporation (NYSE: RLI) is an E&S insurance carrier with a wide range of products for consumers and businesses. Its insider buying is noteworthy because Q1 2025 buying is the first significant activity since 2023 when they sold, and the buying volume is robust. Insiders, including numerous directors and the CEO, made sizeable purchases amounting to $800,000. The purchases are also significant because the insiders already owned nearly 5% of the stock and had considerable exposure to the business.
Coincidentally, institutional activity is also bullish for this market. The institutions bought on balance every quarter of 2024 and ramped activity in Q1 2025. Buying volume hit a record high, netting nearly $100 million in shares or roughly 1.4% of the stock, bringing the total interest to almost 80%. The institutions will likely continue to buy in 2025 because the stock trades near historically low levels and offers a relatively high-yielding dividend. The dividend is worth nearly 3.5%, with shares at $75 and is expected to grow annually. The company has increased its payout for 12 consecutive years, pays out only 20% of its earnings, and has a healthy balance sheet, so there is nothing to cloud the distribution outlook.
Harmonic Inc. Insiders Buy the Dip
Harmonic Inc. (NASDAQ: HLIT) is a global provider of small-cap broadband access solutions. Its stock price is under pressure in 2025 because of securities fraud allegations relating to misleading statements. The company’s 2024 are the reasons; they are better than expected, but strengths were offset by diminished guidance, which resulted in a 20% stock price plunge after the Q4 results were released. However, sell-siders, including the CEO, CFO, and two directors, stepped in to buy this stock on the dip, and they aren’t the only ones.
Institutional activity also ramped to a two-year high, netting about $30 million in the first two months of Q2 or about 2.45% of the stock. This is a strong tailwind for the price action because institutions and insiders own virtually 100% of the stock. Analysts are another tailwind, rating the stock at Moderate Buy and forecasting a 20% upside at the consensus. A move to the consensus target would be significant because it is above the cluster of moving averages, including the 150-day EMA, and a signal of shifting market sentiment.
Insiders Sell Drug Discovery Firm Inotiv
Inotiv (NASDAQ: NOTV) is a small drug discovery firm whose insiders are selling. The selling is noteworthy because the sales in Q1 2025 are the first in years, reversing the buying trend that began in early 2023. Insiders selling include the CEO, CFO, and an SVP, reducing their holding to a still-solid 7.8%. Institutions, conversely, are buying this stock and ramping their activity to a multiyear high. They own a slight 18% of the company but can significantly lift the market if the buying frenzy continues.
Analysts sentiment is equally bullish. InsiderTrades.com tracks only a handful of analysts covering this stock, but they rate it as a Moderate Buy and see it advancing 35% in the low-end range and more than 100% in the high range.
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