Insiders who bought stock earlier this year lose -US$53k as Coherent Corp. (NYSE:COHR) drops to US$5.4b
The recent 12% drop in Coherent Corp.'s (NYSE:COHR) stock could come as a blow to insiders who purchased US$438k worth of stock at an average buy price of US$43.84 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$385k.
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.
View our latest analysis for Coherent
Coherent Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Joseph Corasanti for US$438k worth of shares, at about US$43.84 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$38.54). 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Joseph Corasanti.
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!
Coherent is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Coherent Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Coherent shares. In total, CFO & Treasurer Mary Raymond dumped US$164k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Coherent insiders own about US$70m worth of shares. That equates to 1.3% of the company. 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 Coherent Insiders?
An insider sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So we're happy enough to look past some selling. 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 instance, we've identified 3 warning signs for Coherent (1 makes us a bit uncomfortable) you should be aware of.
But note: Coherent 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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