It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Wilhelmina International, Inc. (NASDAQ:WHLM).
Do Insider Transactions Matter?
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Wilhelmina International
The Independent Director, Horst-Dieter Esch, made the biggest insider sale in the last 12 months. That single transaction was for US$350k worth of shares at a price of US$7.00 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$5.40. So it is hard to draw any strong conclusion from it. Horst-Dieter Esch was the only individual insider to sell shares in the last twelve months.
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!
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Wilhelmina International insiders own 36% of the company, worth about US$10m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Wilhelmina International Insider Transactions Indicate?
The fact that there have been no Wilhelmina International insider transactions recently certainly doesn’t bother us. Still, the insider transactions at Wilhelmina International in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.