Insider Stock Buying Reaches US$1.61m On Dow

Over the last year, a good number of insiders have significantly increased their holdings in Dow Inc. ( NYSE:DOW ). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Dow

The Last 12 Months Of Insider Transactions At Dow

Notably, that recent purchase by James Fitterling is the biggest insider purchase of Dow shares that we've seen in the last year. That means that even when the share price was higher than US$40.57 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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 Dow insiders were buying shares, but not selling. 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!

Dow is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Dow Insiders Bought Stock Recently

Over the last quarter, Dow insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$1.6m worth of shares. That shows some optimism about the company's future.

Insider Ownership Of Dow

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Dow insiders own about US$50m worth of shares. That equates to 0.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Dow Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Dow we think they are probably pretty confident of a bright future. 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. For instance, we've identified 3 warning signs for Dow(1 is concerning) you should be aware of.