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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Rekor Systems, Inc. (NASDAQ:REKR).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Rekor Systems Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Robert Berman for US$7.0m worth of shares, at about US$2.57 per share. We do like to see buying, but this purchase was made at well below the current price of US$7.43. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid US$7.1m for 2.74m shares. But insiders sold 2.73m shares worth US$7.0m. In the last twelve months there was more buying than selling by Rekor Systems insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Rekor Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Rekor Systems Have Bought Stock Recently
It's good to see that Rekor Systems insiders have made notable investments in the company's shares. Overall, three insiders shelled out US$71k for shares in the company -- and none sold. That shows some optimism about the company's future.
For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 28% of Rekor Systems shares, worth about US$70m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Rekor Systems Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Rekor Systems shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rekor Systems. Our analysis shows 4 warning signs for Rekor Systems (2 are concerning!) and we strongly recommend you look at them before investing.
Of course Rekor Systems 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.
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. 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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