Ultralife Reaches US$158m Market Cap Benefiting Insider Stock Buying

Ultralife Corporation (NASDAQ:ULBI) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a US$14m rise in the company's market capitalisation, translating to a gain of 28% on their initial investment. As a result, the stock they originally bought for US$319.2k is now worth US$407.2k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Ultralife

The Last 12 Months Of Insider Transactions At Ultralife

In the last twelve months, the biggest single purchase by an insider was when Chair of the Board of Directors Bradford Whitmore bought US$181k worth of shares at a price of US$7.34 per share. Even though the purchase was made at a significantly lower price than the recent price (US$9.28), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Ultralife insiders bought shares during the last year, they didn't sell. 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!

Ultralife is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Ultralife 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 36% of Ultralife shares, worth about US$57m. 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 Ultralife Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Ultralife insiders are doubting the company, and they do own shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Ultralife.

But note: Ultralife 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.