We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in TransAct Technologies Incorporated (NASDAQ:TACT).
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.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
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TransAct Technologies Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Independent Director Graham Tanaka for US$340k worth of shares, at about US$10.62 per share. That means that an insider was selling shares at below the current price (US$10.69). While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 21.3% of Graham Tanaka’s stake.
All up, insiders sold more shares in TransAct Technologies than they bought, over the last year. The sellers received a price of around US$11.28, on average. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see a visual depiction of insider transactions (by 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!
I will like TransAct Technologies better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at TransAct Technologies Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at TransAct Technologies. Specifically, Graham Tanaka ditched US$1.2m 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.
Insider Ownership of TransAct Technologies
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data suggests TransAct Technologies insiders own 3.8% of the company, worth about US$3.0m. We consider this fairly low insider ownership.
So What Does This Data Suggest About TransAct Technologies Insiders?
An insider hasn’t bought TransAct Technologies stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn’t bring confidence, either. Insiders own relatively few shares in the company, and when you consider the sales, we’re not particularly excited about the stock. So we’re not rushing to buy, to say the least. Of course, the future is what matters most. So if you are interested in TransAct Technologies, you should check out this free report on analyst forecasts for the company.
Of course TransAct Technologies may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 firstname.lastname@example.org.