A falling share price presents investors with two competing possibilities: the market has become too pessimistic, or the business is worth less than it used to be. Quarterly reports rarely settle that argument immediately. Orders can weaken before management cuts guidance, customers can delay payments without cancelling contracts, and an acquisition can produce revenue growth while reducing what existing shareholders earn. Investors sell because they cannot confidently price those risks, even when the company still looks profitable.
Corporate insiders have a closer view of those businesses. Executives see customer behavior, operating costs and financing requirements between earnings reports; directors scrutinize budgets and strategic decisions. That perspective can make a purchase after a decline worthy of investigation. A director’s modest addition also deserves less weight than several executives committing substantial fresh capital. The purchase must be evaluated alongside the buyer’s existing exposure.
The difference is visible in Ameresco, where insider purchases accompanied a business still requiring cash to execute its projects. The question to ask was whether buying reflected a durable operating recovery, rather than whether it predicted next week’s price. Our analysis, Ameresco Insiders Bought About $1.9 Million After the Stock Fell. Are They Signaling an AI Power Rebound?, examines that tension.
The companies below face different versions of the same uncertainty. Homebuilders must sell houses without surrendering too much margin through incentives. Consumer businesses must protect volumes while recovering higher costs. Infrastructure companies need enough financing to turn customer commitments into operating assets. For an example of why that last step is significant, How Sustainable Is Oracle’s Cash Flow Without Customer Prepayments? separates customer funding from the cash its expansion consumes.
Nor does a large drop from a previous high prove a stock is cheap. That high may have assumed profits the company can no longer deliver. A low earnings multiple can be equally misleading when today’s profits represent an incredibly strong point in a cycle. Micron Looks Cheap on Earnings. How Much Can Profits Fall Before That Changes? shows why the earnings denominator needs as much scrutiny as the share price.
When we first launched Insider Monkey in 2010 we exclusively focused on tracking insider transactions. There reason is pretty straightforward. Investing is a risky business. There is always uncertainty because we, the investors, don’t have perfect information. When the stocks in our portfolio start going down, we sometimes get scared and sell our shares. Insiders have better information than we do. It isn’t perfect but they know the nuances of their business and they know what they can and can’t do to turn things around. That’s why sometimes they buy after their stocks decline and sometimes they keep selling. In this article we will bring 10 stocks insiders are buying at deeply discounted prices. If the insiders are right, these stocks should perform well over the next 6 to 12 months.
Our Methodology:
We reviewed Insider Monkey’s insider-purchase records and the filings for transactions dated September 26 through October 24, 2026. We shortlisted 10 companies with U.S. exchange-listed shares or ADRs, market caps of at least $5 billion at the October 23 close, and purchases following a meaningful share-price decline. We excluded stock awards and option exercises from the qualifying purchases.
Large shareholders qualify alongside officers and directors; we identify those differences explicitly.
We ranked the 10 companies by the number of hedge funds holding their shares in Insider Monkey’s Q2 2026 database, from lowest to highest. Q1 comparisons provide context, but the tracked fund universe changes and the holdings predate these purchases. Short-interest figures refer to September 30, 2026. Market values and quoted share prices use October 23 unless otherwise stated.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
These strategy returns are measured through June 2, 2026.
10. Telecom Argentina S.A. (NYSE:TEO)
Number of Hedge Fund Holders: 16
Telecom Argentina’s ADR fell 11.5% between September 23 and October 9. Currency exposure and the obligations attached to its Telefónica Argentina acquisition complicate the recovery case. On October 14, the board accepted Metrotel’s $450 million offer, plus applicable taxes, for assets and associated sharing arrangements required by the competition remedy.
On October 9, digital-growth and fintech executive Martín Andrés Heine bought 7,000 Class B ordinary shares for about $18,663. These represented 1,400 ADRs economically. The purchase increased his reported ordinary-share position from 34,500 to 41,500 (see all insider purchases in TEO shares here).
Bulls can point to Q2 adjusted EBITDA margin improving to 36.8% from 27.7%, using inflation-adjusted results. Preserving purchasing power remains essential as management’s earlier explanation of price increases versus customer-retention discounts is in Telecom Argentina’s Q2 2024 Earnings Call Transcript.
Hedge-fund holders increased from 12 to 16 in Q2. September short interest was 158,350 ADRs, but this U.S. figure alone cannot capture bearish exposure across the company’s share classes and markets.
9. MSC Industrial Direct Co., Inc. (NYSE:MSM)
Number of Hedge Fund Holders: 34
MSC Industrial fell 15.4% on October 22 after its earnings release, despite fiscal fourth-quarter sales rising 10.3%. The industrial distributor’s next-quarter adjusted operating-margin forecast of 9.5%–10.1% was below the latest quarter’s 10.9%. A $41.8 million impairment tied to abandoning its Digital Core project also highlighted execution costs that adjusted earnings exclude.
Director E. Reuben Slone bought 433 shares the following day for $50,129. The purchase followed the selloff, although a modest dollar commitment cannot establish that the earnings reset is finished (see the history of insider purchases in MSM).
The bull case has operating support as adjusted EPS rose to $1.45 from $1.09. Translating recovering demand into lasting profit depends partly on customer retention — the central argument in the earlier MSC Industrial Direct: A Bull Case Theory.
Hedge-fund participation rose from 32 to 34 in Q2. Quantinno held over 0.6 million shares, while AQR held over 0.45 million. Short interest of 2.45 million shares, or 5.4% of float, shows additional skepticism but doesn’t establish a consensus against recovery.
8. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 38
Hormel’s $21.06 share price was 20.8% below its 52-week high. Fiscal Q3 retail organic volume fell 9%, reflecting business exits and contract-manufacturing effects alongside weaker demand. Management lowered its annual sales outlook even while raising the bottom of its adjusted EPS range, leaving investors dependent on efficiency gains.
Board chairman William Newlands bought 10,000 shares at $20.10 on October 5, spending $201,000. His reported position increased about 15%, making this more than a token addition, though it remains one buyer’s judgment. You can see the 17 year history of insider purchases in HRL here.
Hedge-fund holders increased from 35 to 38 in Q2, before this purchase. September short interest was 22.8 million shares. Those opposing positions among hedge funds point to the the need for evidence that stronger profitability can survive continued volume pressure.
The proposed $1.055 billion Brakebush acquisition would expand Hormel’s foodservice chicken business, but management does not expect adjusted EPS accretion until fiscal 2028. Buying growth creates another test for capital allocation. Hormel: Can Foodservice Expansion Earn More Than Its Cost of Capital? examines the returns hurdle. A recovery needs better demand and acquisition economics.
7. Acuity Inc. (NYSE:AYI)
Number of Hedge Fund Holders: 40
Acuity’s lighting business faces softer demand and margin pressure. Fiscal Q4 lighting sales slipped 0.4%, while its adjusted operating margin fell 130 basis points to 18.8%. At $318.72, the stock remained 16.2% below its 52-week high despite recovering from lower levels.
The institutional picture is quite divided, with hedge-fund holders’ number falling from 43 to 40 in Q2, in Insider Monkey database, yet AQR increased its position from 0.44 million to 1.27 million shares. September short interest was 3.2% of float. Fewer holders did not prevent one large quantitative manager from substantially expanding its exposure.
Director Laura O’Shaughnessy bought 73 shares at $302.32 on October 16, spending $22,069. Her reported position rose only 2.3%, so this purchase deserves limited weight in the investment case.
Bulls have stronger operating evidence in the Intelligent Spaces segment, where quarterly sales increased 16.6%. Full-year operating cash flow reached $825.6 million, supporting debt repayment and repurchases. The question is whether that progress can outweigh weakness in the much larger lighting operation. Acuity Downgraded on a Softening Lighting Market: Cyclical Dip or Structural Slowdown? examines the demand pressures behind the discount.
6. McCormick & Company, Incorporated (NYSE:MKC)
Number of Hedge Fund Holders: 48
McCormick’s shares were 33.5% below their 52-week high at $48.12. Its proposed combination with Unilever’s food business introduces financing, integration and regulatory risks just as organic demand remains subdued. Fiscal Q3 organic sales increased 1.9%, with pricing offsetting slightly negative volume and mix; headline sales growth of 17.4% largely reflected acquisitions.
Director Gavin Hattersley bought 1,000 nonvoting shares at $44.61 on October 2, committing $44,610 near the stock’s annual low. Before 2026 the last time an insider bought MKC shares was in 2017 (see the history here) which makes this a notable purchase.
The bull case rests on a wider brand portfolio and operating efficiencies. Existing McCormick shareholders would own 35% of the combined company, making the benefits per share more relevant than the combined business’s size. McCormick-Unilever Food Deal Faces UK Competition Review: What It Means for Investors explains how regulatory conditions could affect that outcome.
Hedge-fund participation stayed at 48 in Q2. September short interest was 8.3% of float, but the stock-based transaction can attract merger hedges; it would be misleading to treat every short share as an outright bet against McCormick’s business.
5. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 52
The Foot Locker acquisition has complicated DICK’S recovery case. Q2 comparable sales rose 4.9% at the core business but fell 3.6% on a pro forma basis at Foot Locker, which recorded a $31.9 million operating loss. Full-year adjusted EPS guidance of $11–$12 reflects a less profitable combined business than investors had hoped. Shares were 40.2% below their 52-week high at $144.65.
Matthew Barnes, president of Foot Locker International, bought 3,665 shares for $499,869 on September 30. His operating role makes the purchase relevant to the struggling acquired business.
Hedge-fund holders rose from 48 to 52 in Q2. The subsequent September short position reached 11.34 million shares, or 17.9% of float, up 41.6% from the previous reporting period. That increase warrants attention.
Bulls need the healthy core operation to sustain growth while Foot Locker’s promotions and operating losses recede. DICK’S Sporting Goods’ Foot Locker Integration Clouding Strong Core Results separates those two businesses and explains why acquisition-driven revenue growth alone is insufficient.
4. Applied Digital Corporation (NASDAQ:APLD)
Number of Hedge Fund Holders: 59
Applied Digital traded at $18.25, 64% below its 52-week high. Its data-center expansion offers substantial growth, but investors must finance construction before the full earnings stream arrives. At August 31, debt totaled $6.4 billion against $3.7 billion of cash and restricted cash; restricted balances are not freely available for every corporate need.
CEO Wes Cummins bought 55,803 shares and president Jason Gechen Zhang bought 300,000 shares on October 16, committing a combined $6.66 million. This cluster is a stronger cash commitment than the small director purchases elsewhere in the list. It was not unanimous insider buying: director Richard Nottenburg sold 31,250 shares on October 13.
Bulls have about 1.41 GW of leased capacity supporting roughly $36 billion of contracted revenue over the leases’ initial base terms. Fiscal Q1 adjusted EBITDA reached $64.4 million excluding ChronoScale, whereas the debt and cash figures above are consolidated. Keeping financing costs from consuming that progress is critical; our comparison of CoreWeave and IREN’s Different Rate Risks explains why contracted revenue does not remove expansion-financing risk across AI infrastructure.
Hedge-fund holders increased from 39 to 59 in Q2, the largest increase in this group. September short interest remained around 21% of float. Outstanding convertible notes mean some shorts could hedge debt exposure, so neither the high short percentage nor the older fund-count increase establishes a simple institutional verdict.
3. Lennar Corporation (NYSE:LEN)
Number of Hedge Fund Holders: 65
Berkshire Hathaway bought 2.42 million Lennar Class A and Class B shares on October 1–2 for $192.63 million. This was a rather large-shareholder purchase, not an operating executive buying personally, and the filing does not identify Warren Buffett as the decision-maker.
The housing downturn explains the opportunity and the risk here. Fiscal Q3 new orders fell 9%, and home-sales gross margin dropped to 15.8% from 17.5% as affordability pressures and incentives weighed on profitability. At $84.92, the Class A shares remained 36.5% below their 52-week high.
Bulls expect cheaper, faster construction and eventual demand stabilization to improve returns. But lower building costs help shareholders only if customer concessions do not absorb the savings. Lennar Cuts Delivery Forecast. Can Construction Savings Offset Heavy Incentives? examines that constraint.
Hedge-fund participation edged down from 66 to 65 in Q2, when Berkshire already held 13.11 million Class A shares. September short interest was about 9.3% of float. Berkshire’s later buying therefore should not be presented as evidence that institutional investors widely agree the housing cycle has bottomed.
2. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holders: 80
PG&E Corporation (PCG) shares declined over 30% in recent months primarily due to a major political stalemate over wildfire liability protections in California and a weak third-quarter earnings report.
Hedge-fund participation stayed at 80 in Q2, with AQR holding 86.28 million common shares. That is substantial exposure predating the strategic review. September short interest was around 1.7% of float, much lower than at several other companies in this list.
Director John Larsen bought 7,500 shares at $12.20 on September 30, spending $91,500 and bringing his reported holdings to 36,685 shares.
The bullish argument has a near-term earnings foundation: on October 22, PG&E maintained 2026 core EPS guidance of $1.64–$1.66 and its 2027 range of $1.78–$1.82, despite weaker quarterly earnings. This means a growing stock is trading at a depressed 7 times its 2027 earnings. The unresolved question is whether an “unexpected” wildfire will push the company into bankruptcy again. The market thinks there is a 60% probability that this will happen. Insider John Larsen seems to disagree.
Read also PG&E’s $2 Billion Spending Deferral Raises Questions Over Its Growth Outlook
1. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 119
Oracle’s cloud demand has not eliminated doubts about paying for the capacity behind it. Fiscal Q1 infrastructure-cloud revenue increased 121% to $7.4 billion, but cash capital expenditure of $28.5 billion exceeded operating cash flow of $23.1 billion. Customer prepayments supplied $11.36 billion of that operating inflow. The stock closed at $126.16, 56.1% below its 52-week high.
Director Stephen Rusckowski’s trust bought 25,000 shares at a weighted average $139.352 on September 29, spending $3.48 million. By the cutoff, the shares were already 9.5% below his purchase price, a useful reminder that informed buyers can be early.
Hedge-fund holders increased from 115 to 119 in Q2; Fisher Asset Management held 13.26 million shares. September short interest was 2.6% of float, so the price decline should not be confused with exceptionally crowded outright short positioning.
Bulls have a $664 billion remaining-performance-obligation balance supporting future revenue visibility. Converting those commitments into cash after investment is the harder test. How Sustainable Is Oracle’s Cash Flow Without Customer Prepayments? examines the financing dependence that headline cloud growth can obscure.
While we acknowledge the risk and potential of ORCL as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than ORCL that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
READ NEXT: Ameresco Insiders Bought About $1.9 Million After the Stock Fell. Are They Signaling an AI Power Rebound? and Micron Looks Cheap on Earnings. How Much Can Profits Fall Before That Changes?
