We often see insiders buying up shares in companies that perform well over the long term. 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 Gogo Inc. (NASDAQ:GOGO).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 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.’
The Last 12 Months Of Insider Transactions At Gogo
Director Charles Townsend made the biggest insider purchase in the last 12 months. That single transaction was for US$1.8m worth of shares at a price of US$5.04 each. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.
Happily, we note that in the last year insiders bought 910.00k shares for a total of US$4.4m. In the last twelve months there was more buying than selling by Gogo insiders. Their average price was about US$4.78. Although they bought at below the recent price of US$4.83 per share, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Gogo is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Gogo Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Gogo. Charles Townsend spent US$1.8m on stock, and there wasn’t any selling. That shows some optimism about the company’s future.
Does Gogo Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Gogo insiders own about US$38m worth of shares. That equates to 8.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Gogo Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Gogo we think they are probably pretty confident of a bright future. 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.
But note: Gogo 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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