Insider Spends US$621k Buying More Shares In Telos

Those following along with Telos Corporation (NASDAQ:TLS) will no doubt be intrigued by the recent purchase of shares by Fredrick Schaufeld, Independent Director of the company, who spent a stonking US$621k on stock at an average price of US$2.49. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 11%.

Check out our latest analysis for Telos

The Last 12 Months Of Insider Transactions At Telos

In fact, the recent purchase by Independent Director Fredrick Schaufeld was not their only acquisition of Telos shares this year. Earlier in the year, they paid US$4.08 per share in a US$1.1m purchase. That means that an insider was happy to buy shares at above the current price of US$2.77. 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Telos insiders were buying shares, but not selling. Their average price was about US$3.41. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Telos Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 14% of Telos shares, worth about US$29m. 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 Do The Telos Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Telos 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. To help with this, we've discovered 3 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Telos.

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 of direct interests only, but not derivative transactions or indirect interests.

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