Insiders who bought US$137m worth of Amkor Technology, Inc.’s (NASDAQ:AMKR) stock at an average buy price of US$24.68 over the last year may be disappointed by the recent 12% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$93m, which is not what they expected.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Amkor Technology
The Executive Chairman of the Board James Kim made the biggest insider purchase in the last 12 months. That single transaction was for US$92m worth of shares at a price of US$24.68 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$16.65). 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. To us, it’s very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid US$137m for 5.57m shares. But they sold 17.50k shares for US$436k. In total, Amkor Technology 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!
Amkor Technology is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Amkor Technology
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Amkor Technology insiders own 52% of the company, worth about US$2.1b. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Amkor Technology Tell Us?
It doesn’t really mean much that no insider has traded Amkor Technology shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Amkor Technology insiders are reasonably well aligned (owning significant chunk of the company’s shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Amkor Technology that deserve your attention before buying any shares.
But note: Amkor Technology 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.