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Insiders who acquired US$3.5m worth of SQL Technologies Corp.'s (NASDAQ:SKYX) stock at an average price of US$14.00 in the past 12 months may be dismayed by the recent 66% price decline. 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$932k which is not ideal.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At SQL Technologies
Over the last year, we can see that the biggest insider purchase was by Director Dov Shiff for US$3.3m worth of shares, at about US$14.00 per share. That means that even when the share price was higher than US$3.73 (the recent price), an insider wanted to purchase shares. 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. 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.
In the last twelve months SQL Technologies insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
SQL Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at SQL Technologies Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at SQL Technologies. Overall, two insiders shelled out US$3.5m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does SQL Technologies Boast High Insider Ownership?
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. It's great to see that SQL Technologies insiders own 36% of the company, worth about US$105m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At SQL Technologies Tell Us?
The recent insider purchases are heartening. 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. When combined with notable insider ownership, these factors suggest SQL Technologies insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that SQL Technologies has 3 warning signs (1 is a bit concerning!) that deserve your attention before going any further with your analysis.
Of course SQL Technologies 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 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.