Stock Analysis

How Much Are Eastman Kodak Company (NYSE:KODK) Insiders Taking Off The Table?

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NYSE:KODK
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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 shareholders might well want to know whether insiders have been buying or selling shares in Eastman Kodak Company (NYSE:KODK).

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, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

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Eastman Kodak Insider Transactions Over The Last Year

The insider, Moses Marx, made the biggest insider sale in the last 12 months. That single transaction was for US$8.9m worth of shares at a price of US$40.41 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$7.53. So it may not shed much light on insider confidence at current levels.

In the last twelve months insiders purchased 603.34k shares for US$1.4m. But insiders sold 650.30k shares worth US$9.9m. In total, Eastman Kodak insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:KODK Insider Trading Volume December 7th 2020

I will like Eastman Kodak better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership of Eastman Kodak

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Eastman Kodak insiders own about US$36m worth of shares. That equates to 6.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Eastman Kodak Insider Transactions Indicate?

The fact that there have been no Eastman Kodak insider transactions recently certainly doesn't bother us. Still, the insider transactions at Eastman Kodak in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For instance, we've identified 3 warning signs for Eastman Kodak (2 are a bit unpleasant) you should be aware of.

Of course Eastman Kodak 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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What are the risks and opportunities for Eastman Kodak?

Eastman Kodak Company provides hardware, software, consumables, and services to customers in the commercial print, packaging, publishing, manufacturing, and entertainment markets worldwide.

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Risks

  • Earnings have declined by 26.6% per year over past 5 years

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