Tesla, Inc. (NASDAQ:TSLA) shareholders (or potential shareholders) will be happy to see that the Founder, Elon Musk, recently bought a whopping US$10.0m worth of stock, at a price of US$767. While that only increased their holding size by 0.04%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At Tesla
In fact, the recent purchase by Co-Founder Elon Musk was not their only acquisition of Tesla shares this year. They previously made an even bigger purchase of US$25m worth of shares at a price of US$243 per share. We do like to see buying, but this purchase was made at well below the current price of US$899. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months insiders purchased 118.53k shares for US$36m. On the other hand they divested 818 shares, for US$274k. In the last twelve months there was more buying than selling by Tesla insiders. The average buy price was around US$306. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Tesla is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Tesla insiders own 21% of the company, currently worth about US$34b 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.
What Might The Insider Transactions At Tesla Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Tesla insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Tesla 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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