We’d be surprised if International Business Machines Corporation (NYSE:IBM) Stockholders have failed to notice that an insider, Robert Del Bene, recently sold $445,000 worth of shares at $148 per share. That sale accounted for 17% of their stake, so we raise an eyebrow.
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International Business Machines insider transactions over the past year
In fact, the recent sale of Robert Del Bene was the largest sale of International Business Machines stock by an insider in the past 12 months, according to our records. That said, even when the stock price was slightly below the current price of $149, an insider wanted to cash in on some shares. We generally view it negatively when insiders have sold, particularly if they have sold below the current price, as this implies that they believed a lower price was appropriate. However, please note that sellers may have a variety of reasons for selling, so we’re not sure what they think of the share price. It’s worth noting that this sale represented only 17% of Robert Del Bene’s stake.
Insiders bought 1,08,000 shares for $135,000 over the last 12 months. But insiders sold 4,60,000 shares worth $668,000. Robert Del Bene sold a total of 4,60,000 shares during the year at an average price of $145. You can see insider transactions (of companies and individuals) over the past year in the chart below. If you click on the chart you will see all the individual transactions including the stock price, the individual and the date!
I’ll like International Business Machines better when I see some big insider buys. While we wait, take a look at this free List of growing companies with significant recent insider purchases.
Looking at the total number of insider holdings in a company can help inform your opinion of whether they are well aligned with common shareholders. Typically, the higher the insider ownership, the more likely it is that insiders will be incentivized to build the company over the long term. International Business Machines insiders own 0.08% of the company, which is currently valued at approximately $106 million based on its recent stock price. Most shareholders would appreciate this type of insider ownership, as it suggests that management’s incentives are well-aligned with other shareholders.
So what does this data say about International Business Machines insiders?
Unfortunately, there have been more insider sales of International Business Machines stock than purchases over the past three months. Zooming out, the longer-term picture doesn’t give us much comfort. The company boasts a high level of insider ownership, but we’re a little hesitant given its stock sales history. While we like to know what’s going on with the insider’s ownership and transactions, we also consider the risks a stock faces before making an investment decision. For example, we have identified 5 Warning Signs of International Business Machines (1 must not be ignored) should be noted.
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For the purposes of this article, insiders are individuals who report their transactions to the relevant regulator. We currently account for open market transactions and private dispositions, but not derivatives transactions.
The assessment is complex, but we help to simplify it.
find out if International Business Machines may be over or under priced by reviewing our comprehensive analysis which includes the following Fair Value Estimates, Risks and Warnings, Dividends, Insider Trading and Financial Health.
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