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 Telenav Inc (NASDAQ:TNAV), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, including certain disclosures.
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.’
Check out our latest analysis for Telenav
The Last 12 Months Of Insider Transactions At Telenav
Co-Founder H. Jin made the biggest insider purchase in the last 12 months. That single transaction was for US$113k worth of shares at a price of US$5.68 each. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
In the last twelve months insiders paid US$578k for 130.55k shares purchased. Overall, Telenav insiders were net buyers last year. Their average price was about US$4.43. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$3.51. The chart below shows insider transactions over the last year. 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).
Telenav Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Telenav. Overall, 4 insiders shelled out US$414k for shares in the company — and none sold. This makes one think the business has some good points.
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. We usually like to see fairly high levels of insider ownership. Insiders own 5.8% of Telenav shares, worth about US$9.2m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Telenav Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Telenav insiders are reasonably well aligned, and optimistic for the future. Of course, the future is what matters most. So if you are interested in Telenav, you should check out this free report on analyst forecasts for the company.
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.
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 editorial-team@simplywallst.com.