We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Amkor Technology, Inc. (NASDAQ:AMKR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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.’
The Last 12 Months Of Insider Transactions At Amkor Technology
President Stephen Kelley made the biggest insider purchase in the last 12 months. That single transaction was for US$949k worth of shares at a price of US$6.33 each. Even though the purchase was made at a significantly lower price than the recent price (US$9.03), we still think insider buying is a positive. But because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Amkor Technology Insiders Are Selling The Stock
The last three months saw significant insider selling at Amkor Technology. In total, Lead Independent Director Winston Churchill dumped US$165k worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Amkor Technology insiders own about US$1.0b worth of shares (which is 48% 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.
What Might The Insider Transactions At Amkor Technology Tell Us?
An insider sold stock recently, but they haven’t been buying. On the other hand, the insider transactions over the last year are encouraging. We are also comforted by the high levels of insider ownership. So we’re happy to look past recent trading. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.