Yahoo Finance Insiders purchases in SEEK Limited (ASX:SEK) last year yet to pay off, remain down AU$32k despite recent gains
Insiders who purchased AU$276k worth of SEEK Limited (ASX:SEK) shares over the past year recouped some of their losses after price gained 5.9% last week. However, total losses seen by insiders are still AU$32k but in since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for SEEK
SEEK Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Michael Wachtel bought AU$110k worth of shares at a price of AU$27.75 per share. That means that an insider was happy to buy shares at above the current price of AU$21.21. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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.
While SEEK insiders bought shares during the last year, they didn't sell. They paid about AU$24.00 on average. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
SEEK Insiders Bought Stock Recently
It's good to see that SEEK insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$126k worth of shares. This could be interpreted as suggesting a positive outlook.
Insider Ownership
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that SEEK insiders own 3.6% of the company, worth about AU$267m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The SEEK Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest SEEK insiders are well aligned, and quite possibly think the share price is too low. Nice! 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 example - SEEK has 1 warning sign we think you should be aware of.
Of course SEEK 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.
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