Insiders at Integrated Media Technology Limited (NASDAQ:IMTE) sold A$4.2 million worth of shares, a possible red flag that has yet to materialize
While Limited built-in media technology (NASDAQ:IMTE) Shareholders had a good week with a stock up 65%, they shouldn’t let their guard down. Even though share prices were relatively low, insiders opted to sell A$4.2 million worth of shares over the past year, which could indicate an expected slowdown.
While we don’t believe shareholders should simply follow insider trades, logic dictates that you pay attention to whether insiders are buying or selling shares.
The last 12 months of insider trading at Integrated Media Technology
Over the past year, we can see that the largest insider sale was by insider Ying Chiu Lee for $4.2 million worth of shares, at around $2.25 per share. Clearly, then, an insider wanted to take money off the table, even below the current price of US$11.41. Generally, we consider it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, this is only a weak signal. It should be noted that this sale accounted for 90% of Ying Chiu Lee’s stake. The only individual insider seller over the past year was Ying Chiu Lee.
The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart, you can see all individual trades including stock price, individual and date!
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Internal ownership of embedded media technology
Another way to test alignment between a company’s executives and other shareholders is to look at how many shares they own. We generally like to see fairly high levels of insider ownership. It appears that Integrated Media Technology insiders own 31% of the company, which is worth around $34 million. This level of insider ownership is good, but just short of being particularly noteworthy. This certainly suggests a reasonable degree of alignment.
So what does this data suggest about embedded media technology insiders?
The fact that there have been no Integrated Media Technology insider deals recently certainly doesn’t bother us. Our analysis of Integrated Media Technology insider trading leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing what insider trading is going on, it pays to identify the risks that Integrated Media Technology faces. For example, we have identified 4 Warning Signs for Integrated Media Technology (3 are of concern) you should be aware.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of attractive companies, which have a high return on equity and low debt.
For the purposes of this article, insiders are persons who report their transactions to the relevant regulatory body. We currently record open market transactions and private dispositions, but not derivative transactions.
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