ITM Power Reaches UK£281m Market Cap Benefiting Insider Stock Buying

Last week, ITM Power Plc (LON:ITM) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 45% last week, resulting in a UK£87m increase in the company's market worth, implying a 18% gain on their initial purchase. In other words, the original UK£190.3k purchase is now worth UK£223.9k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At ITM Power

The CEO & Director Dennis Schulz made the biggest insider purchase in the last 12 months. That single transaction was for UK£51k worth of shares at a price of UK£0.40 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.46. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While ITM Power insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. 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 always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At ITM Power Have Bought Stock Recently

There was some insider buying at ITM Power over the last quarter. CFO & Director Amy Grey shelled out UK£30k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does ITM Power Boast High Insider Ownership?

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. ITM Power insiders own about UK£13m worth of shares. That equates to 4.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At ITM Power Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. 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. Case in point: We've spotted 2 warning signs for ITM Power you should be aware of.

But note: ITM Power 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 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.