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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in The ExOne Company (NASDAQ:XONE).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
ExOne Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Roger Thiltgen bought US$81k worth of shares at a price of US$8.10 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$7.80). 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. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Roger Thiltgen was the only individual insider to buy shares in the last twelve months.
Roger Thiltgen purchased 20000 shares over the year. The average price per share was US$7.53. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
ExOne is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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 ExOne insiders own 38% of the company, worth about US$49m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The ExOne Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give 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 ExOne insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in ExOne, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.