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 Ultralife Corporation (NASDAQ:ULBI), that sends out a positive message to the company’s 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.
The Last 12 Months Of Insider Transactions At Ultralife
The Independent Chairman Bradford Whitmore made the biggest insider purchase in the last 12 months. That single transaction was for US$467k worth of shares at a price of US$4.73 each. That means that even when the share price was higher than US$4.02 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
Ultralife insiders may have bought shares in the last year, but they didn’t sell any. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Ultralife Have Bought Stock Recently
Over the last quarter, Ultralife insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$470k worth of shares. This could be interpreted as suggesting a positive outlook.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Ultralife insiders own about US$25m worth of shares. That equates to 38% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Ultralife Tell Us?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Ultralife we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Ultralife has 1 warning sign and it would be unwise to ignore this.
Of course Ultralife 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.
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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.
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