Insiders Rewarded With €653k Addition To Investment As TomTom Stock Hits €705m

Insiders who bought TomTom N.V. (AMS:TOM2) stock in the last 12 months were richly rewarded last week. The company's market value increased by €96m as a result of the stock's 16% gain over the same period. As a result, their original purchase of €2.21m worth of stock is now worth €2.87m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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TomTom Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Co-Founder Harold C. Goddijn for €405k worth of shares, at about €4.16 per share. We do like to see buying, but this purchase was made at well below the current price of €5.73. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Harold C. Goddijn bought a total of 500.00k shares over the year at an average price of €4.42. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for TomTom

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).

Does TomTom Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. TomTom insiders own 55% of the company, currently worth about €385m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At TomTom Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest TomTom insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. At Simply Wall St, we found 1 warning sign for TomTom that deserve your attention before buying any shares.

But note: TomTom 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.