“When Elon Musk buys €1m worth of Tesla stock relative to everything he owns, it’s nothing,” said Mustapha Mamache, senior analyst at Varenne Capital (Varenne), during a presentation in Luxembourg on 21 May 2026. He added, "The whole purpose of my work is to understand why insiders buy, why they sell, and the context behind those transactions.”

Corporate insiders—including executives, board members, major shareholders, and affiliated family entities—must publicly disclose transactions in company stock. Varenne’s strategy aims to identify unusual or meaningful patterns within those disclosures.

While reviewing academic research on insider trading, Mamache said Varenne Capital relies primarily on empirical observation and behavioural analysis. Together with Georges Muzea, a former adviser to George Soros on insider trading, Mamache helped develop Varenne’s analytical framework.

How insider transactions shape investment strategy

“Unlike delayed earnings reports, this information is live,” stressed Mamache. Varenne’s investment strategy leverages the systematic decoding of management transactions to generate alpha by identifying signals that fundamental analysis might overlook, explained Franck Herve, director, business development at Varenne Capital.

This approach is based on the belief that corporate insiders—including CEOs, CFOs, and board members—possess superior information regarding their company’s day-to-day operations and long-term strategy.

By tracking the public declarations these individuals are legally required to make to authorities such as the AMF in France or the SEC in the US, Mamache identifies unusual transaction patterns that suggest a “time advantage” over the broader market.

Turning insider data into an investment edge

The cornerstone of this strategy is a proprietary database containing over 8 million transactions dating back to 2011, covering 500,000 insiders in 50,000 companies across 60 countries. To manage this vast dataset, Varenne has transitioned from weekly to hourly data updates, allowing the firm to react quickly to market developments.

The analysis focuses on detecting “pure” transactions—those motivated solely by an individual’s investment conviction rather than automated plans, tax requirements, or routine stock option exercises. Automated “10b5-1” trading plans in the US allow executives to pre-schedule stock sales, making those transactions less informative than discretionary purchases.

Mamache argued that their tool is a behavioural lens that also functions as a risk-management mechanism. “We can’t afford holding 5% to 10% of a fund in a company while the entire management team is selling.” According to Mamache, that would undermine the investment thesis.

Insider trades guide on long bets

Varenne categorises insider activity into specific patterns to determine investment potential. For long positions, highly valued signals include “Cluster Activity Buy,” where multiple key executives buy shares simultaneously, and “Industrial Pattern Buy,” involving large aggregate purchases relative to a company’s market capitalisation.

Mamache uses artificial intelligence to analyse complex documents such as Universal Registration Documents (URDs). The goal is to measure purchases relative to an insider’s annual compensation and determine whether a trade reflects genuine conviction or a negligible exposure.

Insider buying flags high-conviction opportunities

A notable case study involved Booking Holdings (Booking.com) in 2022. Varenne’s system flagged two “pure” purchases totalling €1.9m by Booking Holdings chairman Robert Mylod, the company’s former CFO between 1999 and 2011. It was his first share purchase in more than a decade.

Further analysis showed he had already met the ownership requirements tied to his role, meaning the purchase was a high-conviction signal. Coupled with fundamental data showing record travel reservations, Varenne invested and achieved a 50% to 60% return in five months.

Similarly, in the case of ASML, a cluster of four insiders, including the CEO and CFO, bought €2m worth of shares, on the same day, just before a “quiet period.” The investment later generated an 80% gain. Some executives, including the CFO, were purchasing shares for the first time. Mamache noted that a partnership with Samsung was announced a few weeks later.

“The US is a seller’s market,” said Mamache. He argued that there are so many stock options, warrants, and similar compensation schemes that people are constantly selling. “Insiders buying in the US is still relatively rare.” That is when typically Varenne starts paying attention.

“Buy on strength” happens when, despite the current valuation levels, insiders continue buying. t suggests insiders still see meaningful upside despite elevated valuations. “That’s a pattern we find particularly compelling.”

Insider selling signals downside risk

Conversely, short signals may include the ‘Industrial Pattern Sell’, while Mamache stressed that ‘cluster activity’ can be particularly informative, provided it is assessed through additional and detailed research. When the entire management team at Ulta Beauty (US equivalent to Sephora) sold $237m in vested shares, Varenne drastically reduced its position, avoiding a subsequent 30% price drop.

Extreme case study: NMC Healthcare

Muddy Waters, an independent equity research firm, issued a fraud report on NMC Healthcare, a company operating hospitals in the Emirates and listed in the UK. This report triggered a share price drop. Mamache tracked two Emirati insiders who sold GBP400m in shares were followed by the founder, Mr Shetty, who sold GBP130m a day after his resignation.

Once he had resigned from the company, he no longer qualified as a corporate insider under disclosure rules. The stock was suspended three days later, and its value fell to zero once €2bn in hidden debt was revealed. The FBI later opened an investigation.

Ultimately, Mamache views insiders as “fund managers” of their own companies, seeking to follow those with the strongest long-term track records. While the strategy must account for geopolitical volatility and market noise, Varenne believes insider behaviour offers a valuable complement to traditional fundamental analysis.