Thomas Med Wernhoff Is The Independent Chairman of Image Systems AB (STO:IS) And They Just Picked Up 1.5% More Shares

Even if it's not a huge purchase, we think it was good to see that Thomas Med Wernhoff, the Independent Chairman of Image Systems AB (STO:IS) recently shelled out kr236k to buy stock, at kr1.25 per share. Although the purchase is not a big one, increasing their shareholding by only 1.5%, it can be interpreted as a good sign.

View our latest analysis for Image Systems

Image Systems Insider Transactions Over The Last Year

In fact, the recent purchase by Independent Chairman Thomas Med Wernhoff was not their only acquisition of Image Systems shares this year. They previously made an even bigger purchase of kr677k worth of shares at a price of kr1.46 per share. That means that even when the share price was higher than kr1.27 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. The only individual insider to buy over the last year was Thomas Med Wernhoff.

Thomas Med Wernhoff bought a total of 1.28m shares over the year at an average price of kr1.42. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Image Systems

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 27% of Image Systems shares, worth about kr30m. 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 Image Systems Tell Us?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Image Systems shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Image Systems and understanding this should be part of your investment process.

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, but not derivative transactions.

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