The recent price decline of 19% in CommScope Holding Company, Inc.'s (NASDAQ:COMM) stock may have disappointed insiders who bought US$1.59m worth of shares at an average price of US$2.13 in the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$747.6k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
CommScope Holding Company Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President Charles Treadway for US$250k worth of shares, at about US$1.63 per share. That means that an insider was happy to buy shares at above the current price of US$1.00. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While CommScope Holding Company insiders bought shares during the last year, they didn't sell. They paid about US$2.13 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
NasdaqGS:COMM Insider Trading Volume April 16th 2024
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).
CommScope Holding Company Insiders Bought Stock Recently
Over the last quarter, CommScope Holding Company insiders have spent a meaningful amount on shares. In total, insiders bought US$268k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership Of CommScope Holding Company
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that CommScope Holding Company insiders own 2.8% of the company, worth about US$6.4m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At CommScope Holding Company Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that CommScope Holding Company insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing CommScope Holding Company. To that end, you should learn about the 3 warning signs we've spotted with CommScope Holding Company (including 1 which makes us a bit uncomfortable).
But note: CommScope Holding Company 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 of direct interests only, but not derivative transactions or indirect interests.
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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.