IQE Insider Confidence Rewarded, Stock Hits UK£197m Market Cap
Insiders who bought IQE plc (LON:IQE) stock in the last 12 months were richly rewarded last week. The company's market value increased by UK£27m as a result of the stock's 16% gain over the same period. In other words, the original UK£234.4k purchase is now worth UK£280.2k.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for IQE
The Last 12 Months Of Insider Transactions At IQE
Notably, that recent purchase by Americo Lemos is the biggest insider purchase of IQE shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.20. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. IQE insiders own about UK£16m worth of shares. That equates to 8.1% 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 Does This Data Suggest About IQE Insiders?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of IQE we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that IQE is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
