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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of ITM Power Plc (LON:ITM), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for ITM Power
ITM Power Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Dennis Schulz bought UK£51k worth of shares at a price of UK£0.40 per share. That means that an insider was happy to buy shares at above the current price of UK£0.35. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid UK£163k for 394.24k shares. But insiders sold 4.53k shares worth UK£2.5k. Overall, ITM Power insiders were net buyers during the last year. The chart below shows insider transactions (by companies and 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!
ITM Power is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At ITM Power Have Bought Stock Recently
Over the last quarter, ITM Power insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought UK£160k worth of shares. That shows some optimism about the company's future.
Does ITM Power Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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 ITM Power insiders own 4.7% of the company, worth about UK£10m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.