2 Stocks to Buy and 2 to Sell, According to Insiders

All top investors rely on signals to know when to buy and sell. Some focus on “smart money” flows, others use seasonal factors, while one approach highlighted in this digest relies on insider transactions as a preferred metric.

The strategy is presented as a way to improve consistency by forcing traders and algorithms to wait for higher-quality opportunities while avoiding weaker setups. The digest cites an example from February, when 11 stocks were flagged for insider selling; over the following month, those companies reportedly fell an average of 9%.

Combining signals: the “Shadow Data Indicator” concept

The digest then raises a question: what if multiple signals could be combined into a single strategy? In quant terms, this is described as an “ensemble model” or “multifactor model,” intended to let stronger signals override weaker ones and surface the best opportunities.

Stansberry Research’s Josh Baylin is referenced for a system branded the Shadow Data Indicator (SDI). The digest says the SDI combines thousands of signals and data points into a “mosaic” built from “Shadow Data” across roughly 145 tech companies, with the strategy tested using 90-day holding periods.

In recent back-tests over the past eight years, the digest claims the approach produced at least 442 winners. It also lists examples of large 90-day gains attributed to the SDI framework: Datadog Inc. (DDOG) up 187%, Lyft Inc. (LYFT) up 159%, Etsy Inc. (ETSY) up 132%, and Coinbase Global Inc. (COIN) up 106% after being flagged by SDI.

Insider-transaction picks: two stocks to buy

The digest shifts back to insider transactions and presents two buy recommendations.

ThredUp Inc. (TDUP)

ThredUp is described as an online consignment firm that accepts used clothing through a “Clean Out Kit,” then sorts, evaluates, and lists items for resale. The digest says sellers can earn from a few dollars up to $30 per item, while buyers can save 50% to 80% versus new clothing prices, with items presented with quality certification.

Operational updates cited include revenue growth of 18% in the most recent quarter and active buyers rising 30% to 1.65 million. The digest also states the company flipped to positive cash flows in 2025 and could break even on a net income basis as early as 2028.

Despite these positives, the digest notes the stock is down 13% from the last time it was recommended in October, and that shares remain 85% below their all-time high reached in 2021. It adds that a director purchase on its board is presented as a reason to reconsider the stock.

Nike Inc. (NKE)

Nike is described as having faced major challenges, including a strategic pivot under former CEO John Donahoe that reduced physical store presence and increased reliance on recycled classics. The digest claims this contributed to a 75% collapse in stock prices since 2021 and describes leadership turnover in the C-suite.

Under new CEO Elliott Hill, the digest says Nike has cleaned out sales channels and introduced new products to compete with upstarts such as Hoka and On. It also cites Hill’s willingness to accept short-term shocks, including a double-digit decline in Greater China sales, to clear old inventory at discounted prices.

The digest points to a director purchase reported last week and says that at $42, Nike’s stock is “too cheap to ignore.” It also states that long-term investors should expect perhaps a 2X return over the next three to four years.

Insider-transaction picks: two stocks to sell

The digest says insider selling is flashing more strongly in areas it associates with high expectations, including AI and crypto.

CoreWeave Inc. (CRWV)

In February, the digest warned that insiders appeared unusually bearish about CoreWeave, an AI data center firm. It describes many sales as occurring under 10b5-1 plans and says the pace of selling was “astonishing,” with sales reportedly happening soon after shares were awarded.

It lists February insider selling figures: the Chief Development Officer sold almost 1 million shares, the Chief Strategy Officer sold roughly 770,000 shares, and the CEO sold roughly 300,000 shares. The digest says shares fell 15% over the following month.

It then describes a second opportunity to sell as the stock reportedly rose back above $90 for the first time since February, with insider sales again signaling investors to exit around the $100 level. For April, the digest cites: the Chief Strategy Officer sold more than 2.5 million shares, the Chief Development Officer sold roughly 330,000 shares, and the CEO sold about 444,000 shares.

Despite expected industry strength, the digest says analysts expect CoreWeave’s revenues to more than double to $12.4 billion this year from $5.1 billion in 2025, while losses are also expected to double. It concludes that the speed of insider selling suggests better AI opportunities exist elsewhere, naming Akamai Technologies Inc. (AKAM) and PayPal Holdings Inc. (PYPL) as examples.

Circle Internet Group Inc. (CRCL)

Circle, the company behind the stablecoin USDC, is presented as the second sell candidate. The digest describes the stablecoin model as taking customer deposits by issuing dollar-backed tokens and investing proceeds in short-term Treasurys, with interest earned by Circle and principal returned when customers redeem.

It highlights two concerns. First, it notes that stablecoin issuers can face “greed” and liquidity risk if deposits are invested into higher-yield assets that lock up funds, increasing the risk of a bank-run scenario. Second, it emphasizes Circle’s reliance on the Sky, Binance, and Ethena platforms, which the digest says account for around 80% of Circle’s growth and take distribution deals that reduce Circle’s share of interest revenues.

The digest argues that margins could decline at the same time a new Federal Reserve chairman is expected to begin his job. It states that if Kevin Warsh cuts interest rates as many expect, reducing the interest “spread” Circle can earn, then up to a third of Circle’s revenues could vanish.

It also cites insider selling activity: since the start of April, insiders have sold 67,667 shares through 10 different 10b5-1 plan sales. While described as preplanned, the digest says the volume suggests insiders set up schemes expecting the stock to decline.

How the “Shadow Data” approach is framed to combine signals

The digest concludes by describing each investment signal as a “window” into where a stock might go. It says some signals provide larger windows, such as cluster insider purchases, while others provide smaller windows, such as web traffic and social media mentions.

It argues that combining these windows creates a clearer mosaic than any single signal alone. It says Baylin’s SDI system uses over 100 models to examine billions of data points and focuses on an elite group of 145 tech firms where the strategy is said to work best, with the SDI approach designed for shorter-term moves.

The digest states that the full presentation is available for viewers to review and decide for themselves.