Insider trading data is nothing new – for years, professional investors and hedge funds have been basing investment decisions on the actions of insiders. Now individual investors can also follow top-performing insiders using TipRanks, which tracks over 37,000 insiders. However, there are many types of insider transactions and many types of insiders. So how can you profit from all this data?

By collating all the data on insider buy transactions, we found the best insiders for investors to follow:

What do the results show us? We can see that out of the five different insider types, CEOs have the highest average return and success rate– understandable given that CEOs probably have the most in-depth company knowledge. Interestingly, CEOs perform even better than CFOs, and significantly better than ten percent owners. CEOs generate over double the average return of owners, while the success rate is also 14% higher. In fact, CEOs generate an impressive 10.1% average return over the S&P 500 with a success rate vs the S&P 500 of 61.8%.

Daily Insider Transactions

To incorporate this research into your own investing strategy, find stocks that top-ranked CEOs are buying right now. TipRanks ranks insiders according to their success rate and average return which enables us to select only four or five star officers. This whittles down our list to insiders that consistently outperform the market.

We also chose only informative buy transactions. TipRanks differentiates between informative and uninformative insider transactions in order to find the best possible trades. Uninformative transactions indicate that an insider is buying/selling shares for reasons that do not necessarily indicate confidence in the company such as exercising share options. In contrast, informative transactions are deliberately made by insiders, often because they feel the stock is undervalued.

This selection generated a list of stocks from which we looked for only transactions by CEOs. The result is a list of three top stocks, Tesla (TSLA), Immucell (ICCC) and ARMOUR (ARR), all of which have seen CEO buying in the last couple of days. In fact controversial billionaire CEO Elon Musk just bought shares worth $25 million in electrical automaker Tesla bringing his total Tesla holding to over $9 billion.

If we click on Elon Musk’s insider profile page we can see that he has a success rate of 61% and an incredible average return of 110%. His most profitable trade was not in Tesla but in recent acquisition SolarCity (SCTY) when the stock soared by 553% in the one year between December 2012 and December 2013. By clicking the blue ‘follow’ button on an insider’s profile page you can get real time notifications of their transactions.