Insiders Of iHeartMedia Are Up 97% On Their US$1.00m Purchase

iHeartMedia, Inc. (NASDAQ:IHRT) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 15%, resulting in a US$64m rise in the company's market capitalisation, translating to a gain of 97% on their initial investment. As a result, the stock they originally bought for US$1.00m is now worth US$1.97m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At iHeartMedia

Over the last year, we can see that the biggest insider purchase was by Chairman & CEO Robert Pittman for US$320k worth of shares, at about US$1.60 per share. We do like to see buying, but this purchase was made at well below the current price of US$3.19. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months insiders purchased 618.39k shares for US$1.0m. But they sold 40.56k shares for US$97k. In total, iHeartMedia 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for iHeartMedia

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

iHeartMedia Insiders Bought Stock Recently

It's good to see that iHeartMedia insiders have made notable investments in the company's shares. We can see that Chairman & CEO Robert Pittman paid US$257k for shares in the company. No-one sold. That shows some optimism about the company's future.

Does iHeartMedia 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. A high insider ownership often makes company leadership more mindful of shareholder interests. iHeartMedia insiders own about US$21m worth of shares. That equates to 5.6% of the company. 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 iHeartMedia Insiders?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of iHeartMedia we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, iHeartMedia has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.

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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.