TPI Composites, Inc.'s (NASDAQ:TPIC) stock rose 16% last week, but insiders who sold US$621k worth of stock over the last year are probably in a more advantageous position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$45.56, which is higher than the current price, may have been the best decision.
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.
The Last 12 Months Of Insider Transactions At TPI Composites
Over the last year, we can see that the biggest insider sale was by the Independent Director, James Hughes, for US$621k worth of shares, at about US$46.75 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$12.50). So it is hard to draw any strong conclusion from it. James Hughes was the only individual insider to sell over the last year. Notably James Hughes was also the biggest buyer, having purchased US$107k worth of shares.
In the last twelve months insiders purchased 7.34k shares for US$107k. On the other hand they divested 13.64k shares, for US$621k. 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!
I will like TPI Composites better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that TPI Composites insiders own 2.3% of the company, worth about US$11m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The TPI Composites Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by TPI Composites insiders. But it's good to see that insiders own shares in the company. 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. In terms of investment risks, we've identified 2 warning signs with TPI Composites and understanding these should be part of your investment process.
Of course TPI Composites may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.