Yahoo Finance Insider Buying: The GigaMedia Limited (NASDAQ:GIGM) Chairman Just Bought 7.0% More Shares
Investors who take an interest in GigaMedia Limited (NASDAQ:GIGM) should definitely note that the Chairman, Cheng-Ming Huang, recently paid US$2.87 per share to buy US$197k worth of the stock. Although the purchase only increased their holding by 7.0%, it is still a solid purchase in our view.
View our latest analysis for GigaMedia
GigaMedia Insider Transactions Over The Last Year
Notably, that recent purchase by Chairman Cheng-Ming Huang was not the only time they bought GigaMedia shares this year. They previously made an even bigger purchase of US$270k worth of shares at a price of US$2.49 per share. That implies that an insider found the current price of US$2.94 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for GigaMedia share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Cheng-Ming Huang.
Cheng-Ming Huang purchased 178.93k shares over the year. The average price per share was US$2.61. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
GigaMedia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does GigaMedia 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. We usually like to see fairly high levels of insider ownership. GigaMedia insiders own 43% of the company, currently worth about US$14m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The GigaMedia Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about GigaMedia. That's what I like to see! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 2 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in GigaMedia.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
This article by Simply Wall St is general in nature. 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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