Investors who take an interest in Ford Motor Company (NYSE:F) should definitely note that the Independent Director, John Thornton, recently paid US$11.62 per share to buy US$100k worth of the stock. While that's a very decent purchase to our minds, it was proportionally a bit modest, boosting their holding by just 3.5%.
Ford Motor Insider Transactions Over The Last Year
The President James Farley made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$5.13 each. Even though the purchase was made at a significantly lower price than the recent price (US$11.70), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months Ford Motor insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Ford Motor insiders own 1.2% of the company, currently worth about US$555m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Ford Motor Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Ford Motor insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Ford Motor.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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