Whilst it may not be a huge deal, we thought it was good to see that the Kip McGrath Education Centres Limited (ASX:KME) Independent Non-Executive Director, Diane Pass, recently bought AU$53k worth of stock, for AU$1.05 per share. That purchase might not be huge but it did increase their holding by 48%.
Kip McGrath Education Centres Insider Transactions Over The Last Year
The Independent Non-Executive Director Trevor Folsom made the biggest insider purchase in the last 12 months. That single transaction was for AU$261k worth of shares at a price of AU$1.19 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$1.00). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Kip McGrath Education Centres insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Kip McGrath Education Centres Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Kip McGrath Education Centres insiders own about AU$16m worth of shares. That equates to 28% 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 Do The Kip McGrath Education Centres Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Kip McGrath Education Centres 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. Our analysis shows 4 warning signs for Kip McGrath Education Centres (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.
But note: Kip McGrath Education Centres may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.