Insiders of IPG Photonics Corporation (NASDAQ: IPGP) who acquired shares in the preceding year were handsomely rewarded last week. The company’s market value climbed by US$309m as a consequence of a 5.6% gain in shares last week. In other words, the initial $251k acquisition is now valued at US$370k.
Although insider transactions are not the most significant aspect of long-term investment, we believe it is prudent to monitor what insiders are doing.
IPG Photonics Insider Trades During The Last Twelve Months
Senior VP & CFO Timothy P. Mammen made the largest single buy by an insider over the past twelve months when he purchased $251k worth of shares at an average price of $83.54 per share. Nevertheless, this transaction was done for far less than the current price of US$123. While this transaction suggests that insiders view the stock to be cheap at lower levels, it does not reveal much about their opinion on present values.
The accompanying graphic depicts the insider transactions (by corporations and individuals) during the past year. If you want to know precisely who sold, when, and for how much, click on the graph below!
Insiders Are Selling IPG Photonics Stock.
IPG Photonics has experienced considerable insider selling during the past three months. During this period, Vice President, Corporate Controller Thomas Burgomaster sold a total of $163k worth of shares, while no acquisitions were recorded. Overall, this makes us somewhat wary, but it is not the deciding factor.
Ownership By Insiders Of IPG Photonics
I like to consider how many shares insiders own in a firm to see how closely they align with insiders. We generally favor quite high levels of insider ownership. IPG Photonics insiders hold shares worth around US$165 million, or 2.8% of the firm. The majority of shareholders would be pleased with this type of insider ownership, as it indicates that management motivations are aligned with those of other shareholders.
So, What Do the Insider Transactions of IPG Photonics Indicate?
Recently, an insider sold stock, but they have not been purchasing. In contrast, insider transactions during the past year have been positive. In addition, a major chunk of the corporation is owned by insiders. Thus we are pleased to disregard recent trade. In addition to being aware of insider transactions, it is useful to recognize the risks IPG Photonics faces. Regarding investing risks, we have highlighted three red flags for IPG Photonics, and recognizing them should be an integral part of your investment process.