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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell TTM Technologies, Inc. (NASDAQ:TTMI), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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. 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.’
TTM Technologies Insider Transactions Over The Last Year
Executive Vice President of Asia Pacific Business Development Tai Chung made the biggest insider sale in the last 12 months. That single transaction was for US$441k worth of shares at a price of US$18.90 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$11.61. So it is hard to draw any strong conclusion from it.
Over the last year we saw more insider selling of TTM Technologies shares, than buying. They sold for an average price of about US$18.90. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$11.61). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 7.0% of TTM Technologies shares, worth about US$85m. 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 TTM Technologies Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. Still, the insider transactions at TTM Technologies in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in TTM Technologies, you should check out this free report on analyst forecasts for the company.
But note: TTM Technologies 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.
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.