Having purchased US$2.5m worth of iHeartMedia, Inc. (NASDAQ:IHRT) stock, the recent 6.7% pullback is not what insiders may have expected
Insiders who bought US$2.5m worth of iHeartMedia, Inc.'s (NASDAQ:IHRT) stock at an average buy price of US$13.77 over the last year may be disappointed by the recent 6.7% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$1.5m which is not ideal.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for iHeartMedia
iHeartMedia Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Robert Pittman bought US$518k worth of shares at a price of US$13.21 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$8.00). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While iHeartMedia insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At iHeartMedia Have Bought Stock Recently
Over the last quarter, iHeartMedia insiders have spent a meaningful amount on shares. We can see that Chairman & CEO Robert Pittman paid US$504k for shares in the company. No-one sold. That shows some optimism about the company's future.
Does iHeartMedia Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that iHeartMedia insiders own 1.4% of the company, worth about US$17m. 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 iHeartMedia Tell Us?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of iHeartMedia we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of iHeartMedia.
But note: iHeartMedia 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.
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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