We recently compiled a list of the 10 Large-Cap Stocks with Insider Buying in 2025.In this article, we are going to take a look at where Dow Inc. (NYSE:DOW) stands against the other large-cap stocks.
Insider buying is one of the strongest indirect signals that analysts and successful investors often use to assess whether a stock is undervalued or not. The intuition behind this stems from the fact that high-ranked insiders such as named executive officers and directors possess confidential information that may give greater visibility into the company’s future and growth trajectory. Insiders leverage such information as real-time data on sales and orders, and discussions with key clients, suppliers and other stakeholders, to form a better understanding of the company’s valuation. For instance, insiders often show net selling of their own company stock at peak valuations, just days or weeks before a major market correction happens; and vice versa, insiders often show net buying at or near market bottoms, days or weeks before the stock price starts to increase. This is clearly not a coincidence most of the time. Also, many successful investors emphasized the idea that insider buying is often a stronger signal than selling. Here is what Peter Lynch, one of the greatest ever, said on this topic:
“Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”
With the US stock market having experienced a very strong bull market for the last 2 years, insider buying has become increasingly muted, with insider selling starting to prevail, especially in apparently overbought sectors like technology. This trend suggests that executives and institutional investors may see limited upside in certain high-flying stocks, prompting them to lock in gains. However, a significant portion of those strong returns have been driven only by a handful of companies, often called the “Magnificent 8”, which experienced an uplift from AI and other megatrends. At the same time, on an equal-weight basis, the US stock market has had a more modest performance. Some sectors like healthcare are at or near multi-year lows on a relative basis, driven by a combination of headwinds as well as a lack of tailwinds to the same extent as the technology leaders. The key takeaway for investors is that regardless of what point in the cycle we are, or how long into a bull market we are, both buying and selling opportunities will exist.
The US stock market is still near its early 2025 all-time high and exhibits peak concentration and net insider selling. We believe that at such extreme points, when high valuation concerns are widely spread in the news, the signals provided by insiders buying their own company stocks are more valuable than ever. Their actions can indicate where genuine value exists beneath the broader market’s surface, highlighting sectors or individual companies that may be overlooked or undervalued. Insider buying in such an environment suggests confidence in a company’s long-term fundamentals, despite broader market uncertainties or short-term volatility. Investors who pay close attention to these signals may uncover opportunities in sectors that have lagged behind, offering potential for strong future returns as market conditions evolve. Last but not least, large-cap companies are usually widely followed and exhibit more price efficiency; consequently, insider buying signals in these stocks are even more relevant in our opinion.
Our Methodology
We used Insider Monkey’s insider trading stock screener to find large-cap stocks with at least two insiders buying shares worth at least $100,000 in the last six months. We believe that multiple insiders buying significant amounts of stock represents a higher chance that insiders have high confidence in the company. For all the companies, we also include the number of hedge funds tracked by Insider Monkey, as of Q4 2024, that own the stock. The stocks are ranked in ascending order of their hedge fund holdings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Dow Inc. (DOW) the Best Dividend Stock Yielding at Least 7% According to Analysts?
A technician operating state of the art machines manufacturing specialized packaging materials.
Dow Inc. (NYSE:DOW) is a global materials science company specializing in the production of plastics, industrial intermediates, coatings, and silicones. The company operates through three primary segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. Dow serves diverse industries, including packaging, infrastructure, mobility, and consumer applications, with a presence in over 31 countries. The company was formed in 2019 following the separation from DowDuPont, which itself was a merger of Dow Chemical and DuPont in 2017. The Michigan-based company ranked second on our recent list of 10 Best Dividend Stocks Yielding at Least 7% According to Analysts.
Dow Inc. (NYSE:DOW) delivered its fifth consecutive quarter of YoY volume growth despite weak macroeconomic conditions, with 4Q 2024 net sales of $10.4 billion, down 2% YoY, and operating EBITDA of $1.2 billion, which was approximately flat compared to the same period last year. The company announced significant strategic actions including a $1 billion cost reduction target by 2026, primarily focused on third-party contract labor and purchased services, along with the elimination of approximately 1,500 roles. Dow entered into a definitive agreement with Macquarie Asset Management to sell a 40% equity stake in select US Gulf Coast infrastructure assets, expecting to generate approximately $2.4 billion in initial cash proceeds, with potential to increase to $3 billion if Macquarie exercises its option to increase stake to 49%.
In response to persistently weak global macroeconomic conditions, Dow Inc. (NYSE:DOW) announced a strategic review of select European assets, primarily in the polyurethanes business, where demand has been structurally challenged over the past 5 years. Additionally, DOW is reducing its 2025 CapEx spending by $300 million to $500 million compared to the previously disclosed target of $3.5 billion and will maintain these levels until a clear recovery materializes across broad portions of end markets. The company remains committed to maintaining its industry-leading dividend, with north of 65% of owners counting on that dividend as a priority. Despite the aforementioned macro headwinds, the insiders buying signal that the local bottom in stock price is likely in the rear-view mirror.
Overall DOW ranks 8th on our list of the large-cap stocks with insider buying in 2025. While we acknowledge the potential of DOW as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
