Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of comScore, Inc. (NASDAQ:SCOR), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for comScore
Over the last year, we can see that the biggest insider purchase was by Independent Director Matthew McLaughlin for US$406k worth of shares, at about US$16.23 per share. That means that an insider was happy to buy shares at above the current price of US$6.31. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months comScore insiders were buying shares, but not selling. 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!
comScore is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that comScore insiders own 11% of the company, worth about US$3.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
It doesn't really mean much that no insider has traded comScore shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if comScore insiders bought more shares in the company. 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 comScore has 2 warning signs and it would be unwise to ignore them.
But note: comScore 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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