Methodology · SEC Form 4 Insider Cluster Scanner v2
Every business day at 14:30 UTC we scan all SEC Form 4 filings from the past 30 days, parse open-market P-code transactions (the highest-signal type — Lakonishok & Lee 2001 showed insider buys outperform market by ~11%/year), and group them into clusters when 2+ insiders independently buy the same stock.
Score (0–100) combines: number of distinct insiders, total dollar value, presence of CEO/CFO/Chairman buys (highest role_tier), buy-to-52-week-high distance (stronger signal when stock is down), and time concentration. Score ≥ 70 = "strong_signal".
Signal types:
ceo_conviction — CEO personally bought (rarest, highest-conviction).
smart_money_dual — 2+ C-suite officers (CEO/CFO/COO/Chairman) bought together.
cluster_buy — 3+ insiders of any rank, possibly including outside directors.
contrarian — buys at significant distance from 52-week high (typically > 25% below).
Why this matters: insiders have asymmetric information about their company's prospects. When multiple insiders independently put their own capital in, the signal-to-noise ratio is far higher than for individual trades (which can be liquidity or estate planning). Bloomberg's INSDX function charges thousands per terminal; SEC EDGAR is free.
Source: SEC EDGAR Form 4 XML + FMP fundamentals overlay · daily 14:30 UTC after EDGAR EOD.