Potential Titan Machinery Inc. (NASDAQ:TITN) shareholders may wish to note that the Chairman of the Board & Co-Founder, David Meyer, recently bought US$430k worth of stock, paying US$16.83 for each share. Although the purchase only increased their holding by 1.3%, it is still a solid purchase in our view.
Notably, that recent purchase by Chairman of the Board & Co-Founder David Meyer was not the only time they bought Titan Machinery shares this year. Earlier in the year, they paid US$18.12 per share in a US$997k purchase. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$17.98). 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. We always take careful note of the price insiders pay when purchasing 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.
In the last twelve months Titan Machinery insiders were buying shares, but not selling. 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!
See our latest analysis for Titan Machinery
Titan Machinery is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
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. We usually like to see fairly high levels of insider ownership. Insiders own 11% of Titan Machinery shares, worth about US$44m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Titan Machinery insiders are well aligned, and that they may think the share price is too low. While it’s good to be aware of 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. In terms of investment risks, we’ve identified 1 warning sign with Titan Machinery and understanding it should be part of your investment process.
