When it comes to analyzing insider trades, investors should keep several important nuances in mind. For example, insider sales can often appear alarming until one realizes that they were made under a predetermined Rule 10b5-1 plan. Because insiders must schedule these trades far in advance of their execution, they don’t provide a clear bearish signal.
Meanwhile, insider buying tends to be a much better indicator for investors. As famed asset manager Peter Lynch once said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise."
To this end, let’s break down the recent insider buys and news surrounding three high-risk names: GameStop (NYSE: GME), USA Rare Earth (NASDAQ: USAR), and Under Armour (NYSE: UA).
Insiders and Michael Burry Buy GME Amid CEO’s Bold Statements
GameStop has been in and out of financial headlines for years now, most known for its association with the “meme-stock” phenomenon.
Recently, CEO Ryan Cohen conducted an interview with the Wall Street Journal. Cohen reportedly wants to acquire a major public company to turn GameStop into a much larger firm. Notably, the company has $8.8 billion in cash, cash equivalents, and marketable securities available to finance an acquisition.
Still, details are scant at this point, with Cohen saying, “It’s ultimately either going to be genius or totally, totally foolish.” Despite the huge amount of uncertainty surrounding Cohen’s plans, insiders and outside investors and buying GME shares.
Three insiders purchased a total of nearly $11 million in shares from Jan. 20 to Jan. 23.
Additionally, "Big Short" investor Michael Burry has been buying GME. While this insider buying provides positive signals, betting big on GameStop remains risky—especially since almost all of GME’s recent insider buying came from Cohen himself.
USAR Insiders Make Purchases After Key Funding Announcements
USA Rare Earth is another name seeing notable insider buying. Two insiders purchased a total of around $2.17 million worth of shares on Jan. 29. These buys came days after the company announced a non-binding letter of intent (LOI) with the U.S. Department of Commerce. This LOI could provide USAR with $1.6 billion worth of government funding, $1.3 billion of which would be in the form of a secured loan.
However, the agreement has not been finalized.
USAR has also received $1.5 billion in financing from private investors, earmarked for building out its rare earth mine-to-magnet value chain. Currently, MP Materials (NYSE: MP) remains the only U.S. company with a scaled rare-earth mining operation, a designation that USAR is poised to disrupt.
Given the strategic importance of rare-earth magnets to many technology companies and national defense, it’s logical for the U.S. government to work with USAR.
Clearly, the company insiders are buying into the firm’s future, providing a bullish signal. Still, with massive amounts of volatility and government funding not finalized, USAR is a high-risk stock.
Under Armour Sees Over $200 Million in Insider Buys
Last up is the seemingly forgotten apparel brand Under Armour. Since late December 2025, major shareholder Prem Watsa has purchased a large number of Under Armour shares.
These shares are held by subsidiaries of Fairfax Financial Holdings Limited, of which Watsa is the CEO. In total, Watsa purchased $219 million worth of Under Armour shares from late December to early February, which were underpinned by $1 million of insider purchases from three separate individuals in August 2025.
These buyers were vindicated on Feb. 6, when shares surged by over 19% on Under Armour's latest earnings report, which beat sales expectations and delivered an adjusted earnings-per-share (EPS) surprise.
While these insider buys and the company’s earnings are positive signs, Under Armour’s outlook is mixed. Much of the company’s EPS beat came from a one-time tax benefit. Additionally, the stock trades at a steep forward price-to-earnings ratio of 59x. It has posted negative sales growth for 11 consecutive quarters and expects sales to decline again next quarter, which may cause investors to question its premium valuation going forward.
Insiders Buys: Positive Indicators, But Not Gospel
While these insider purchases provide encouraging signs from these firm’s key confidants, they are one key indicator that investors should consider. Just as external market watchers can be wrong in their assessments of a stock’s future, so can insiders.
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The article "Insiders Buy 3 High-Risk Stocks—Here’s What’s Driving the Moves" first appeared on MarketBeat.
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