Those following along with Illinois Tool Works Inc. (NYSE:ITW) will no doubt be intrigued by the recent purchase of shares by E. Santi, Chairman & CEO of the company, who spent a stonking US$998k on stock at an average price of US$158. While that only increased their holding size by 4.5%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At Illinois Tool Works
In fact, the recent purchase by E. Santi was the biggest purchase of Illinois Tool Works shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$161. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Illinois Tool Works share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 7.88k shares for US$1.2m. On the other hand they divested 1115 shares, for US$187k. In total, Illinois Tool Works insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Illinois Tool Works 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.
Does Illinois Tool Works 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Illinois Tool Works insiders own 1.0% of the company, currently worth about US$517m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Illinois Tool Works Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Illinois Tool Works. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Illinois Tool Works has 2 warning signs we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.