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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Ziff Davis, Inc.'s (NASDAQ:ZD) instance, it's good news for 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.
View our latest analysis for Ziff Davis
Ziff Davis Insider Transactions Over The Last Year
In fact, the recent purchase by Vivek Shah was the biggest purchase of Ziff Davis shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of US$40.05. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Ziff Davis insiders decided to buy shares at close to current prices.
Ziff Davis insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insiders At Ziff Davis Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Ziff Davis. Not only was there no selling that we can see, but they collectively bought US$774k worth of shares. That shows some optimism about the company's future.
Does Ziff Davis Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.5% of Ziff Davis shares, worth about US$26m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Ziff Davis Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Ziff Davis insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Ziff Davis and understanding this should be part of your investment process.