We have lost the number of times insiders have accumulated shares in a company that continues to improve markedly. The downside of this is that there are more than a few examples of insiders dumping stock before a period of poor performance. So we look at whether insiders have bought or sold shares in Universal Display Corporation (NASDAQ: OLED).
Does insider trading matter?
It is perfectly normal to see company insiders, such as Board members, trading in company shares from time to time. However, such insiders must disclose their trading activities and not trade inside information.
We do not think that shareholders should just follow insider transactions. But it makes perfect sense to keep an eye on what insiders are doing. As Peter Lynch said, ‘insiders can sell their shares for a number of reasons, but they only buy them for one: they think the price will rise’.
The last 12 months of insider transactions by universal display
Over the past year, we can see that the biggest insider sale was by the independent director, C. Hartley, for shares of US $ 2.1 million. For about US $ 214 per. Shares. This means that an insider sold shares at a slightly below current price (US $ 238). As a general rule, we consider it discouraging when insiders sell below the current price because it suggests that they were satisfied with a lower valuation. Be aware, however, that sellers may have different reasons for selling, so we do not know for sure what they think of the stock price. We note that the largest single sale was only 11% of C. Hartley’s inventory.
In total, Universal Display insiders sold more than they bought last year. You can see the insider transactions (of companies and individuals) during the last year shown in the table below. If you click on the chart, you can see all the individual transactions, including stock price, individual and date!
I like Universal Display better if I see some big insider purchases. While we wait, check this out for free list of growing companies with significant, recent insider purchases.
Insider ownership of Universal Display
I like to look at how many shares insiders own in a company, to help inform my perception of how customary they are with insiders. A high insider ownership often makes corporate management more aware of the interests of shareholders. Universal Display insiders own shares worth about US $ 938 million. (Which is 8.4% of the company). I like to see this level of insider ownership because it increases the chances of management thinking of shareholders ’best interests.
So what do the universal Display Insider transactions indicate?
The fact that there have been no Universal Display insider transactions recently certainly does not bother us. It is encouraging that insiders own lots of stocks, but we would like to see more insider purchases as the last year of Universal Display insider transactions does not fill us with confidence. If you’re like me, you might want to consider whether this company will grow or shrink. Fortunately, you can control this for free report showing analysts’ forecasts for its future.
Of course, You can find a great investment by looking elsewhere. So look at this for free list of interesting companies.
For the purposes of this Article, insiders are the persons who report their transactions to the relevant regulatory body. We currently handle open market transactions and private transactions, but not derivative transactions.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any shares and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by basic data. Please note that our analysis may not include the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in the mentioned stocks.
*Interactive brokers rated broker with lowest price by StockBrokers.com Annual online review 2020
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