Iteris, Inc. (NASDAQ:ITI) Insiders Increased Their Holdings
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Iteris, Inc. (NASDAQ:ITI).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Iteris
Iteris Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CFO, Senior VP of Finance & Secretary Douglas Groves bought US$51k worth of shares at a price of US$5.08 per share. That means that an insider was happy to buy shares at above the current price of US$4.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Iteris insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and 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!
Iteris is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Iteris Insiders Bought Stock Recently
We saw some Iteris insider buying shares in the last three months. President J. Bergera bought US$15k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
Insider Ownership
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. Based on our data, Iteris insiders have about 0.7% of the stock, worth approximately US$1.2m. I generally like to see higher levels of ownership.
So What Do The Iteris Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Iteris insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Iteris. Case in point: We've spotted 1 warning sign for Iteris you should be aware of.
Of course Iteris may not be the best stock to buy. So you may wish to see this free collection of high quality 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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