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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Innodata Inc. (NASDAQ:INOD), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.'
Innodata Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Nauman Toor bought US$115k worth of shares at a price of US$1.41 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.95). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders bought 406k shares for a total of US$556k. Innodata may have bought shares in the last year, but they didn't sell any. 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!
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).
Innodata Insiders Bought Stock Recently
We saw some Innodata insider buying shares in the last three months. Insiders shelled out US$22k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Insider Ownership of Innodata
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Innodata insiders own 7.1% of the company, worth about US$1.8m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Innodata Insiders?
Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Innodata insiders are doubting the company. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course Innodata 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 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.