Yahoo Finance Open Text Corporation (NASDAQ:OTEX) insiders need another US$804k to breakeven on a US$24m stock purchase even after recent gains
Insiders who bought US$24m worth of Open Text Corporation (NASDAQ:OTEX) stock in the last year have seen some of their losses recouped as the stock gained 3.3% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$804k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Open Text
The Last 12 Months Of Insider Transactions At Open Text
The Independent Chairman of the Board Paul Jenkins made the biggest insider purchase in the last 12 months. That single transaction was for US$24m worth of shares at a price of US$31.65 each. That means that even when the share price was higher than US$30.76 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 760.15k shares for US$24m. On the other hand they divested 44.04k shares, for US$2.2m. In the last twelve months there was more buying than selling by Open Text insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Open Text is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At Open Text Have Bought Stock Recently
It's good to see that Open Text insiders have made notable investments in the company's shares. Overall, two insiders shelled out US$24m for shares in the company -- and none sold. This makes one think the business has some good points.
Insider Ownership Of Open Text
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Open Text insiders own about US$159m worth of shares (which is 1.9% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Open Text Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Open Text insiders are well aligned, and quite possibly think the share price is too low. Nice! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Open Text.
Of course Open Text may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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