Even if it's not a huge purchase, we think it was good to see that Idar Eikrem, the Executive VP & CFO of Kværner ASA (OB:KVAER) recently shelled out kr430k to buy stock, at kr10.75 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 29%.
Kværner Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman Leif-Arne Langøy bought kr1.9m worth of shares at a price of kr12.93 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being kr10.77). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Kværner insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. 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).
Insider Ownership of Kværner
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. From looking at our data, insiders own kr15m worth of Kværner stock, about 0.5% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Kværner Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Kværner insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Kværner, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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