We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Tech Data Corporation (NASDAQ:TECD), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, including certain disclosures.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
Tech Data Insider Transactions Over The Last Year
Lead Independent Director Charles Adair made the biggest insider sale in the last 12 months. That single transaction was for US$246k worth of shares at a price of US$90.72 each. So we know that an insider sold shares at around the present share price of US$83.91. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at current prices should give us reason to reflect on whether the stock is fully valued at the moment. Charles Adair was the only individual insider to sell shares in the last twelve months.
The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.5% of Tech Data shares, worth about US$48m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Tech Data Tell Us?
An insider sold Tech Data shares recently, but they didn’t buy any. And even if we look to the last year, we didn’t see any purchases. On the plus side, Tech Data makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we’re a little wary. As the saying goes, only fools rush in. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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 email@example.com.