In the last year, many International Business Machines Corporation (NYSE:IBM) insiders sold a substantial stake in the company which may have sparked shareholders’ attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for International Business Machines

International Business Machines Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Senior VP & CFO, James Kavanaugh, for US$5.2m worth of shares, at about US$134 per share. That means that even when the share price was below the current price of US$146, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. This single sale was just 30% of James Kavanaugh’s stake.

Insiders in International Business Machines didn’t buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does International Business Machines Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.07% of International Business Machines shares, worth about US$99m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The International Business Machines Insider Transactions Indicate?

The fact that there have been no International Business Machines insider transactions recently certainly doesn’t bother us. Our analysis of International Business Machines insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing International Business Machines. Case in point: We’ve spotted 4 warning signs for International Business Machines you should be aware of.

Of course International Business Machines 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 of direct interests only, but not derivative transactions or indirect interests.

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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.