Over the last year, a good number of insiders have significantly increased their holdings in International Business Machines Corporation (NYSE:IBM). This is encouraging because it indicates that insiders are more optimistic about the company’s prospects.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At International Business Machines
In the last twelve months, the biggest single purchase by an insider was when insider Frederick McNabb bought US$999k worth of shares at a price of US$108 per share. We do like to see buying, but this purchase was made at well below the current price of US$140. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
In the last twelve months International Business Machines insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. International Business Machines insiders own about US$160m worth of shares (which is 0.1% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At International Business Machines Tell Us?
It doesn’t really mean much that no insider has traded International Business Machines shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like International Business Machines insiders think the business has merit. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing International Business Machines. In terms of investment risks, we’ve identified 4 warning signs with International Business Machines and understanding them should be part of your investment process.
Of course International Business Machines may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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