We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Energous Corporation (NASDAQ:WATT).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
The Last 12 Months Of Insider Transactions At Energous
The Senior VP & CFO, Brian Sereda, made the biggest insider sale in the last 12 months. That single transaction was for US$70k worth of shares at a price of US$4.59 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$1.73). So it is hard to draw any strong conclusion from it.
All up, insiders sold more shares in Energous than they bought, over the last year. 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!
I will like Energous better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Energous Have Sold Stock Recently
There was substantially more insider selling, than buying, of Energous shares over the last three months. We note insiders cashed in US$168k worth of shares. Meanwhile President Stephen Rizzone bought US$65k worth , as we said above . We don’t view these transactions as a positive sign.
Does Energous Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Energous insiders own about US$5.3m worth of shares (which is 9.7% of the company). Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Does This Data Suggest About Energous Insiders?
The insider sales have outweighed the insider buying, at Energous, in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we’re a little wary. We’d certainly think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Energous.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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