We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Rekor Systems, Inc. (NASDAQ:REKR).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Rekor Systems Insider Transactions Over The Last Year
The Executive Chairman Robert Berman made the biggest insider purchase in the last 12 months. That single transaction was for US$7.0m worth of shares at a price of US$2.57 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.20. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 2.74m shares worth US$7.1m. But they sold 2.73m shares for US$7.0m. In total, Rekor Systems insiders bought more than they sold over the last year. 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!
Rekor Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Rekor Systems Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Rekor Systems. In total, insiders bought US$71k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does Rekor Systems Boast High Insider Ownership?
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 Rekor Systems insiders own 28% of the company, worth about US$58m. 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 Does This Data Suggest About Rekor Systems Insiders?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Rekor Systems shares, given these transactions (along with notable insider ownership of 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. For instance, we've identified 4 warning signs for Rekor Systems (2 make us uncomfortable) you should be aware of.
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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Rekor Systems, Inc., through its subsidiaries, develops and implements transformative mission-critical intelligent infrastructure solutions and services for transportation management, public safety, and commercial markets in the United States, Canada, and internationally.
Adequate balance sheet with limited growth.