We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Benchmark Electronics, Inc. (NYSE:BHE).
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 in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
Benchmark Electronics Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Jeffrey McCreary bought US$151k worth of shares at a price of US$20.19 per share. That means that an insider was happy to buy shares at around the current price of US$24.32. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Benchmark Electronics share holders is that an insider was buying at near the current price. Jeffrey McCreary was the only individual insider to buy during the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 of Benchmark Electronics
Many investors like to check how much of a company is owned by 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. Our data indicates that Benchmark Electronics insiders own about US$9.7m worth of shares (which is 1.1% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Benchmark Electronics Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Benchmark Electronics shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Benchmark Electronics insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Benchmark Electronics. Case in point: We've spotted 1 warning sign for Benchmark Electronics you should be aware of.
Of course Benchmark Electronics 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, 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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