A number of insiders bought SecureWorks Corp. (NASDAQ:SCWX) stock last year, which is great news for shareholders
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in SecureWorks Corp.'s (NASDAQ:SCWX) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for SecureWorks
The Last 12 Months Of Insider Transactions At SecureWorks
Over the last year, we can see that the biggest insider purchase was by Senior VP & CFO Paul Parrish for US$56k worth of shares, at about US$11.19 per share. Even though the purchase was made at a significantly lower price than the recent price (US$13.00), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
While SecureWorks insiders bought shares during the last year, they didn't sell. The average buy price was around US$12.36. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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!
SecureWorks is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at SecureWorks Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at SecureWorks. Not only was there no selling that we can see, but they collectively bought US$175k worth of shares. That shows some optimism about the company's future.
Does SecureWorks Boast High 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. It appears that SecureWorks insiders own 3.2% of the company, worth about US$36m. 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 SecureWorks Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest SecureWorks insiders are well aligned, and that they may think the share price is too low. 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. Our analysis shows 3 warning signs for SecureWorks (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.
But note: SecureWorks 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.
