ITM Power Insider Buyers Net UK£114k Despite 10% Stock Decline

Insiders who bought ITM Power Plc (LON:ITM) in the last 12 months may probably not pay attention to the stock's recent 10% drop. After accounting for the recent loss, the UK£190.3k worth of shares they purchased is now worth UK£304.7k, suggesting a good return on their investment.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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ITM Power Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Dennis Schulz bought UK£51k worth of shares at a price of UK£0.40 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.62. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

ITM Power insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for ITM Power

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 4.7% of ITM Power shares, worth about UK£18m. 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 ITM Power Insider Transactions Indicate?

It doesn't really mean much that no insider has traded ITM Power shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in ITM Power and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for ITM Power (of which 1 makes us a bit uncomfortable!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 of direct interests only, but not derivative transactions or indirect interests.

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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.