Multiple insiders secured a larger position in Oracle Corporation (NYSE:ORCL) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Oracle Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Charles Moorman for US$1.3m worth of shares, at about US$84.57 per share. That means that even when the share price was higher than US$63.08 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months insiders purchased 17.28k shares for US$1.5m. On the other hand they divested 6.00k shares, for US$505k. In total, Oracle insiders bought more than they sold over the last year. You can see the insider transactions (by companies and 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!
Oracle is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Oracle
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Oracle insiders own about US$73b worth of shares (which is 43% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Oracle Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Oracle shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Oracle insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Oracle. Case in point: We've spotted 4 warning signs for Oracle you should be aware of, and 2 of these are significant.
Of course Oracle 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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