It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell iFresh Inc. (NASDAQ:IFMK), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
iFresh Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Executive Chairman Long Deng sold US$8.5m worth of shares at a price of US$9.50 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$1.00. So it may not tell us anything about how insiders feel about the current share price. Long Deng was the only individual insider to sell over the last year.
Long Deng sold a total of 1.55m shares over the year at an average price of US$7.18. You can see a visual depiction of insider transactions 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of iFresh
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. iFresh insiders own about US$10m worth of shares (which is 62% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The iFresh Insider Transactions Indicate?
The fact that there have been no iFresh insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of iFresh, we can’t say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in iFresh, 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.