Investors who take an interest in Teradata Corporation (NYSE:TDC) should definitely note that the Chief Financial Officer, Mark Culhane, recently paid US$19.68 per share to buy US$200k worth of the stock. That’s a very solid buy in our book, and increased their holding by a noteworthy 30%.
The Last 12 Months Of Insider Transactions At Teradata
In fact, the recent purchase by Chief Financial Officer Mark Culhane was not their only acquisition of Teradata shares this year. They previously made an even bigger purchase of US$348k worth of shares at a price of US$39.35 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$21.41). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Teradata insiders bought shares last year, they didn’t sell. Their average price was about US$27.50. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Teradata
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. We usually like to see fairly high levels of insider ownership. It appears that Teradata insiders own 1.4% of the company, worth about US$33m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Teradata Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Teradata we think they are probably pretty confident of a bright future. While we like knowing what’s going on with the insider’s ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 2 warning signs for Teradata (1 doesn’t sit too well with us!) that we believe deserve your full attention.
But note: Teradata may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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