We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in IEC Electronics Corp. (NYSEMKT:IEC).
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, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. 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’.
The Last 12 Months Of Insider Transactions At IEC Electronics
Over the last year, we can see that the biggest insider purchase was by Director Charles Hadeed for US$54k worth of shares, at about US$5.42 per share. That implies that an insider found the current (approximate) price enticing. Of course they may have changed their mind. But this suggests they are optimistic. In any event it’s generally a positive if insiders are buying shares at around the current price.
Over the last year, we can see that insiders have bought 20.50k shares worth US$111k. But insiders sold 3.00k shares worth US$25k. In total, IEC Electronics insiders bought more than they sold over the last year. Their average price was about US$5.39. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today’s share price. You can see the insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
IEC Electronics Insiders Are Selling The Stock
The last three months saw some IEC Electronics insider selling. Director Keith Butler only netted US$25k selling shares, in that period. It’s not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn’t bother us.
Does IEC Electronics Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$1.5m worth of IEC Electronics stock, about 2.2% of the company. I generally like to see higher levels of ownership.
What Might The Insider Transactions At IEC Electronics Tell Us?
Insider selling has just outweighed insider buying in the last three months. But the difference is small, and thus, not concerning. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we’d be more comfortable if they owned more IEC Electronics stock. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for IEC Electronics.
But note: IEC Electronics 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.
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