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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 Eastman Kodak Company (NYSE:KODK), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Eastman Kodak
Eastman Kodak Insider Transactions Over The Last Year
The Independent Director Michael Sileck made the biggest insider purchase in the last 12 months. That single transaction was for US$70k worth of shares at a price of US$7.02 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.57). 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. 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.
While Eastman Kodak insiders bought shares during the last year, they didn't sell. 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!
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.
Eastman Kodak Insiders Bought Stock Recently
It's good to see that Eastman Kodak insiders have made notable investments in the company's shares. In total, insiders bought US$109k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Eastman Kodak insiders own about US$46m worth of shares. That equates to 8.4% of the company. 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 Does This Data Suggest About Eastman Kodak Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Eastman Kodak 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 Eastman Kodak and understanding it should be part of your investment process.