Trade Alert: Michelle Howard At International Business Machines Corporation (NYSE:IBM), Has Just Spent US$7.9k Buying A Small Number of Shares

By
Simply Wall St
Published
February 10, 2021
NYSE:IBM

Whilst it may not be a huge deal, we thought it was good to see that Michelle Howard, who is a company insider, recently bought US$7.9k worth of stock, for US$123 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

See our latest analysis for International Business Machines

International Business Machines Insider Transactions Over The Last Year

The insider Frederick McNabb made the biggest insider purchase in the last 12 months. That single transaction was for US$999k worth of shares at a price of US$108 each. That implies that an insider found the current price of US$122 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.

Happily, we note that in the last year insiders paid US$2.9m for 25.70k shares. On the other hand they divested 11.70k shares, for US$1.6m. In total, International Business Machines insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:IBM Insider Trading Volume February 10th 2021

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).

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that International Business Machines insiders own 0.1% of the company, worth about US$145m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At International Business Machines Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like International Business Machines insiders think the business has merit. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that International Business Machines has 3 warning signs and it would be unwise to ignore them.

But note: International Business Machines may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

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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. 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.
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