Yahoo Finance Multiple insiders bought IGO Limited (ASX:IGO) stock earlier this year, a positive sign for shareholders
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of IGO Limited (ASX:IGO), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for IGO
IGO Insider Transactions Over The Last Year
The Independent Non-Executive Director Xiaoping Yang made the biggest insider purchase in the last 12 months. That single transaction was for AU$170k worth of shares at a price of AU$17.01 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$12.54). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Xiaoping Yang was also the biggest seller.
In the last twelve months insiders purchased 25.99k shares for AU$389k. But they sold 10.20k shares for AU$162k. In total, IGO insiders bought more than they sold over the last year. Their average price was about AU$14.98. 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
IGO 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.
Does IGO 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. IGO insiders own about AU$39m worth of shares. That equates to 0.4% of the company. 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 IGO Insider Transactions Indicate?
It doesn't really mean much that no insider has traded IGO shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in IGO and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for IGO and we suggest you have a look.
Of course IGO 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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