Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Abacus Property Group (ASX:ABP), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Abacus Property Group
Notably, that recent purchase by MD & Director Steven Sewell was not the only time they bought Abacus Property Group shares this year. They previously made an even bigger purchase of AU$409k worth of shares at a price of AU$3.56 per share. That means that an insider was happy to buy shares at above the current price of AU$2.70. 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. 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.
Abacus Property Group insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$3.21 on average. This is nice to see since it implies that insiders might see value around current prices. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At Abacus Property Group Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Abacus Property Group. Not only was there no selling that we can see, but they collectively bought AU$304k worth of shares. This could be interpreted as suggesting a positive outlook.
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. Our data suggests Abacus Property Group insiders own 0.2% of the company, worth about AU$4.0m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
So What Do The Abacus Property Group Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Abacus Property Group insiders are expecting 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. For example, Abacus Property Group has 5 warning signs (and 2 which are significant) we think you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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