It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Ormat Technologies, Inc. (NYSE:ORA).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
The Last 12 Months Of Insider Transactions At Ormat Technologies
Over the last year, we can see that the biggest insider purchase was by Chief Financial Officer Assaf Ginzburg for US$1.2m worth of shares, at about US$61.03 per share. Even though the purchase was made at a significantly lower price than the recent price (US$68.62), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While Ormat Technologies insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Ormat Technologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Ormat Technologies
For a common shareholder, it is worth checking how many shares are held by company 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. Our data indicates that Ormat Technologies insiders own about US$5.8m worth of shares (which is 0.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At Ormat Technologies Tell Us?
The fact that there have been no Ormat Technologies insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Ormat Technologies insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ormat Technologies. At Simply Wall St, we've found that Ormat Technologies has 3 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.
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, but not derivative transactions.
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. 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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