When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Acacia Research Corporation's (NASDAQ:ACTG) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Acacia Research
In the last twelve months, the biggest single purchase by an insider was when Chief Financial Officer Richard Rosenstein bought US$127k worth of shares at a price of US$5.10 per share. That means that an insider was happy to buy shares at above the current price of US$4.09. 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 36.00k shares for US$183k. But insiders sold 6.28k shares worth US$30k. In total, Acacia Research insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Acacia Research is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data indicates that Acacia Research insiders own about US$5.5m worth of shares (which is 3.1% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Acacia Research Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Acacia Research stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Acacia Research. Case in point: We've spotted 2 warning signs for Acacia Research you should be aware of, and 1 of these shouldn't be ignored.
But note: Acacia Research may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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