Dow Insiders Placed Bullish Bets Worth US$1.64m

Over the last year, a good number of insiders have significantly increased their holdings in Dow Inc. (NYSE:DOW). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

We've discovered 4 warning signs about Dow. View them for free.

The Last 12 Months Of Insider Transactions At Dow

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO James Fitterling for US$1.1m worth of shares, at about US$41.52 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$30.11). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Dow insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Dow

Dow 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 Dow Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.2% of Dow shares, worth about US$36m. 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 Does This Data Suggest About Dow Insiders?

It doesn't really mean much that no insider has traded Dow shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Dow and their transactions don't cause us concern. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 4 warning signs for Dow (2 can't be ignored) you should be aware of.

Of course Dow 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 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.