Yahoo Finance Insider Spends AU$584k Buying More Shares In Smartgroup
Investors who take an interest in Smartgroup Corporation Ltd (ASX:SIQ) should definitely note that the Independent Non-Executive Chairman, John Prendiville, recently paid AU$8.34 per share to buy AU$584k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 140%, potentially signalling some real optimism.
See our latest analysis for Smartgroup
Smartgroup Insider Transactions Over The Last Year
In fact, the recent purchase by John Prendiville was the biggest purchase of Smartgroup shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$8.38. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Smartgroup share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 82.38k shares for AU$685k. But insiders sold 5.00k shares worth AU$54k. Overall, Smartgroup insiders were net buyers during the last year. You can see the insider transactions (by companies and 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!
Smartgroup is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Smartgroup insiders own 3.9% of the company, worth about AU$43m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Smartgroup Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Smartgroup insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Smartgroup has 1 warning sign and it would be unwise to ignore it.
But note: Smartgroup 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 of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
