Some of the losses seen by insiders who purchased AU$658k worth of Simonds Group Limited (ASX:SIO) shares over the past year were recovered after the stock increased by 14% over the past week. However, total losses seen by insiders are still AU$159k but in since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Simonds Group Insider Transactions Over The Last Year
The Founder & Senior Company Advisor Vallence Simonds made the biggest insider purchase in the last 12 months. That single transaction was for AU$658k worth of shares at a price of AU$0.50 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.36). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Vallence Simonds was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Simonds Group is not the only stock that insiders are buying. For those who like to find winning investments 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. It’s great to see that Simonds Group insiders own 46% of the company, worth about AU$25m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Simonds Group Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Simonds Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Simonds Group insiders think the business has merit. 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. Every company has risks, and we’ve spotted 3 warning signs for Simonds Group you should know about.
Of course Simonds Group 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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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.