IQE plc (LON:IQE) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 13% decline in the stock price. After taking the recent loss into consideration, the UK£1.6m worth of stock they bought is now worth UK£1.7m, indicating that their investment yielded a positive return.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
IQE Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President & Executive Director Andrew Nelson for UK£1.5m worth of shares, at about UK£0.36 per share. That implies that an insider found the current price of UK£0.39 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. Andrew Nelson was the only individual insider to buy during the last year.
Andrew Nelson bought 4.38m shares over the last 12 months at an average price of UK£0.36. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
IQE is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does IQE Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. IQE insiders own about UK£28m worth of shares. That equates to 8.8% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The IQE Insider Transactions Indicate?
The fact that there have been no IQE insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think IQE insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for IQE that deserve your attention before buying any shares.
But note: IQE 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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