An Insider At International Business Machines Lowered Their Holding Recently

Viewing insider transactions for International Business Machines Corporation's (NYSE:IBM ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for International Business Machines

International Business Machines Insider Transactions Over The Last Year

The insider, Michelle Browdy, made the biggest insider sale in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$185 each. That means that even when the share price was below the current price of US$221, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 7.6% of Michelle Browdy's stake. The only individual insider seller over the last year was Michelle Browdy.

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!

I will like International Business Machines better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. International Business Machines insiders own 0.1% of the company, currently worth about US$199m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The International Business Machines Insider Transactions Indicate?

The fact that there have been no International Business Machines insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of International Business Machines, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing International Business Machines. In terms of investment risks, we've identified 1 warning sign with International Business Machines and understanding it should be part of your investment process.

Of course International Business Machines 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.