We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Techedge S.p.A. (BIT:EDGE).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Techedge Insider Transactions Over The Last Year
Founder Domenico Restuccia made the biggest insider purchase in the last 12 months. That single transaction was for €493k worth of shares at a price of €4.62 each. That implies that an insider found the current price of €4.92 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Techedge insider decided to buy shares at close to current prices. The only individual insider to buy over the last year was Domenico Restuccia.
Domenico Restuccia bought a total of 211k shares over the year at an average price of €4.42. You can see the insider transactions (by 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!
Techedge is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Techedge
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Techedge insiders own 42% of the company, currently worth about €53m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Techedge Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Techedge. Nice! Along with insider transactions, I recommend checking if Techedge is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course Techedge may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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