Alpha Buying: Below Book, High Yield, and Insider Conviction
One of the lessons that has stayed with me through decades of bull markets, bear markets, bubbles, crashes, and more than a few outright panics is this: price tells you what people feel today, insiders tell you what they believe about tomorrow.
Markets are emotional. Insiders, at least the good ones, are rational.
That difference matters most when fear is high and prices are low.
Some of the most interesting opportunities I see today sit in an uncomfortable corner of the market. These are companies trading below book value, offering dividend yields that make most investors suspicious, and operating in industries that Wall Street would rather ignore. These are not the stocks that show up on television segments or momentum screens. These are the stocks people apologize for owning.
And yet, quietly, steadily, the people running these companies are buying shares with their own money.
That combination deserves your attention.
Let's start with the obvious. Insiders already have stock. They already get paid in stock. They already have exposure to the business.
So when they go into the open market and buy more shares with their own cash, that is not diversification. That is conviction.
Insiders understand the balance sheet better than anyone. They know where the risks are buried, which assets are understated, which liabilities are overstated, and where the market is simply wrong. They also know when conditions are bad but survivable versus bad and terminal.
When insiders buy aggressively while the stock trades below book value, they are effectively saying this: the market is pricing in a future that we do not recognize.
That is a powerful signal.
In a market obsessed with narratives, growth rates, and artificial intelligence buzzwords, book value has become unfashionable. That is usually when it becomes useful again.
Book value is not a theoretical concept. It represents real assets net of real liabilities. When a stock trades materially below book, the market is telling you it believes those assets are impaired, misvalued, or destined to produce subpar returns forever.
Sometimes that is true.
Often, it is not.
Entire sectors fall out of favor at once. Banks during credit scares. Energy companies during commodity downturns. REITs when interest rates rise. In those moments, fear does not discriminate. Good companies get punished alongside bad ones.
That is where opportunity is created.
High dividend yields scare people because they assume a cut is coming. Sometimes they are right. Sometimes the market has already priced in a dividend cut that never happens.
Here is the part that matters. When dividends are covered by cash flow and insiders are buying stock at depressed prices, the odds shift in your favor.
The dividend does two important things.
First, it pays you to wait. You do not need instant gratification. You are collecting cash while sentiment improves.
Second, it forces discipline on management. Companies paying real dividends cannot endlessly pretend everything is fine. Cash flow either supports the payout, or it does not.
When insiders are buying and dividends remain intact, that combination often signals confidence that conditions will stabilize.
This pattern does not usually appear in trendy sectors. It shows up in places investors have given up on.
Financial stocks during periods of credit stress. Energy companies after commodity prices collapse. Real estate investment trusts when rate fears dominate headlines.
These are asset heavy businesses. Book value matters. Cash flow matters. Survival matters.
When insiders buy aggressively in these sectors while stocks trade below book and yield 5 percent, 6 percent, or more, they are not betting on perfection. They are betting on normalization.
You do not need everything to go right for these investments to work. You just need things to go from bad to less bad.
Not every cheap stock is a bargain. Not every dividend is safe. Not every insider purchase is meaningful.
The key is confirmation.
You want to see multiple insiders buying, not just one symbolic purchase. You want to see purchases made after bad news, not before good news is announced. You want to see dividends covered by cash flow, not financed with debt.
Most importantly, you want to see balance sheets that allow companies to survive long enough for sentiment to change.
This is not about finding perfection. It is about avoiding permanent impairment.
Markets move in cycles. Optimism turns to complacency. Complacency turns to fear. Fear turns into opportunity.
Right now, we are in a market that is very selective about what it loves and brutally dismissive of everything else. That is exactly when insider buying becomes most valuable as a signal.
When insiders are stepping in while everyone else is stepping aside, that is rarely random.
These are not trades built on hype or hope. They are built on valuation, cash flow, and time. They are not designed to double overnight. They are designed to compound quietly while the market argues with itself.
The combination of insider buying, below book value pricing, and high dividend yields is not flashy. It is uncomfortable. It often feels early.
That is exactly why it works.
These are the kinds of setups that reward patience, discipline, and a willingness to look wrong before being proven right. You are not chasing stories. You are buying assets at discounts while getting paid to wait.
That is how real alpha is built over time.
And more often than not, when the people who know the business best are buying, they are not guessing. They are preparing.
Here are four bargain priced high yielding stocks that have recently seen strong insider buying:
Blue Owl Capital Corp. (NYSE:OBDC) is a business development company built to do one thing well: lend money at attractive rates to middle-market companies and pass that income through to shareholders. This is not venture capital and it is not speculative growth lending. OBDC focuses on senior secured loans, strong covenants, and predictable cash flow. That matters in uncertain markets.
The stock has spent extended periods trading below book value as investors worry about private credit, defaults, and a potential economic slowdown. Yet insiders have been buying shares at these discounted prices, signaling confidence that the loan portfolio is holding up better than the market fears. Meanwhile, investors are collecting a dividend yield near double digits while they wait.
This is classic Alpha Buying territory: real assets, real cash flow, insiders buying, and the market focused on worst-case scenarios.
The shares currently yield over 12%.
Chord Energy Corp.(NASDAQ:CHRD) is a reminder that some of the best dividend-paying businesses in the market are also the most misunderstood. At its core, CHRD is a U.S. onshore oil and gas producer with high-quality acreage, disciplined operations, and a business model that prioritizes free cash flow over headline growth.
This is not the old energy playbook of drilling first and worrying about returns later. Chord is built for capital discipline.
What makes Chord particularly interesting today is where it sits in the energy cycle. After years of underinvestment across the industry, supply remains structurally constrained. At the same time, global energy demand continues to rise, even as investors and institutions remain hesitant to embrace fossil fuel producers.
That disconnect has kept valuations compressed, even for companies generating substantial cash flow.
Chord uses that cash flow in a way long-term investors appreciate. The company returns capital through a meaningful dividend while maintaining balance sheet flexibility. The dividend is not based on optimism or aggressive assumptions. It is grounded in current cash generation and a conservative approach to capital spending. That matters in a commodity business.
The shares currently yield 5.4%
Seven Hills Realty Trust (NASDAQ:SEVN) sits at the intersection of fear, complexity, and opportunity. It is a mortgage REIT that focuses on originating and holding first-mortgage loans on commercial real estate properties.
That alone places it in one of the most out-of-favor segments of the market. Commercial real estate has become shorthand for risk in the minds of many investors, and mortgage REITs have been punished accordingly.
What gets lost in the headlines is the distinction between equity ownership and lending. SEVN is not trying to guess what office buildings or apartments are worth five years from now. It is in the business of lending money against properties at conservative loan-to-value ratios, generally sitting at the top of the capital stack. That position matters. First-mortgage lenders get paid before equity holders, preferred shareholders, and mezzanine lenders. In stressed environments, seniority is survival.
The market is currently pricing SEVN as if widespread defaults and permanent impairments are inevitable. That fear is reflected in the share price and in a dividend yield that has moved into the low-to-mid teens. High yields like this make investors nervous, but they also tell you how much pessimism is already embedded in the stock.
SEVN's portfolio is actively managed, with loans that reprice as interest rates change and underwriting that reflects today's credit environment rather than the excesses of the last cycle. This is not a legacy portfolio built on zero-rate assumptions. Management has adjusted loan structures, terms, and pricing to reflect higher rates and tighter liquidity. That flexibility is critical.
The shares currently yield 14%.
TriplePoint Venture Growth Corp. (NYSE:TPVG) occupies a niche that most investors do not fully understand: venture lending.
Instead of betting on equity upside in startups, TPVG lends money to venture-backed companies and often collects warrants as a kicker. The result is a portfolio designed to generate income first and optional upside second.
The stock trades well below book value as investors remain skeptical of anything tied to venture capital after the tech downturn. That skepticism has driven the dividend yield into the mid-teens. Importantly, insiders have been buying shares at these depressed prices, indicating confidence that credit performance is manageable and that the market may be extrapolating too much bad news too far into the future. TPVG fits the Alpha Buying profile perfectly: misunderstood, high yielding, discounted, and supported by insider conviction.
The shares currently yield more than 15%.
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