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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Kulicke and Soffa Industries Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Director Peter Kong bought US$194k worth of shares at a price of US$19.37 per share. That implies that an insider found the current price of US$22.20 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Kulicke and Soffa Industries share holders is that an insider was buying at near the current price. Peter Kong was the only individual insider to buy over the year.
Peter Kong purchased 20000 shares over the year. The average price per share was US$21.53. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Kulicke and Soffa Industries is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Kulicke and Soffa Industries Boast High Insider Ownership?
Many investors like to check how much of a company is owned by 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 appears that Kulicke and Soffa Industries insiders own 2.2% of the company, worth about US$32m. 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 Kulicke and Soffa Industries Insiders?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Kulicke and Soffa Industries shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Kulicke and Soffa Industries, you should check out this free report on analyst forecasts for the company.
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 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 email@example.com. 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.