We’d be surprised if International Business Machines Corporation (NYSE:IBM) shareholders may not have noticed that an insider, Robert Del Benne, recently sold $445,000 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 Trading in the previous year
In fact, the recent sale of Robert Del Benne was the largest sale of International Business Machines stock by an insider in the last 12 months to our records. That means that even when the stock price was slightly below the current price of $149, an insider still wanted to redeem a portion of the shares. We generally view it as negative when insiders sell, especially if they have sold below the current price, as this implies that they believe the lower price is reasonable. Please note, however, that sellers may have many reasons for selling, so we do not know for sure what they think the stock price will be. Significantly, this sale represented only 17 percent of Robert Del Benne’s holding.
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 Benne sold a total of 4,60,000 shares during the year at an average price of $145. You can see insider trading (by companies and individuals) over the past year, shown in the chart below. If you click on the chart, you will see all individual transactions including share price, date and time!
NYSE: IBM Insider Trading Volume November 25, 2022
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within the property
Looking at the total insider stake in a company can help you see if they are well aligned with common shareholders. Generally, the higher the insider ownership, the more likely it is that insiders will be encouraged to stay with the company for the long term. International Business Machines insiders own 0.08% of the company, which is currently valued at $106 million based on the most recent stock price. Most shareholders would welcome such insider ownership, as it shows that management’s incentives are well-aligned with those of other shareholders.
So what does this data say about the insiders of the international trading machines?
Unfortunately, there have been more insider sales of International Business Machines stock than purchases over the past three months. Zoomed out, the long-term image gives us little comfort. The company boasts a high level of insider ownership, but we’re a little hesitant given its history of stock sales. While we’re keen to know what’s going on with insider ownership and trading, we also make sure we understand the risks the stock faces before making any investment decisions. For example, we have identified 5 Warning Signs of International Trading 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 derivative transactions.
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