Tempest Security Stock Down 11% But Insiders Still In kr133k Profit

Tempest Security AB (publ) (STO:TSEC) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 11% decline in the stock price. After accounting for the recent loss, the kr1.20m worth of shares they purchased is now worth kr1.33m, suggesting a good return on their investment.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Tempest Security

The Last 12 Months Of Insider Transactions At Tempest Security

Over the last year, we can see that the biggest insider purchase was by insider Daniel Nyhrén for kr633k worth of shares, at about kr15.04 per share. That implies that an insider found the current price of kr15.90 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Tempest Security insiders decided to buy shares at close to current prices. Notably Daniel Nyhrén was also the biggest seller.

Happily, we note that in the last year insiders paid kr1.2m for 83.60k shares. But they sold 66.94k shares for kr938k. In total, Tempest Security insiders bought more than they sold over the last year. 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!

Tempest Security is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Are Tempest Security Insiders Buying Or Selling?

Over the last three months, we've seen a bit of insider buying at Tempest Security. Insiders bought kr65k worth of shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

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. Tempest Security insiders own about kr74m worth of shares (which is 45% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Tempest Security Insider Transactions Indicate?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Tempest Security. One for the watchlist, at least! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 1 warning sign with Tempest Security and understanding this should be part of your investment process.

But note: Tempest Security 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.