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Insiders who bought US$1.9m worth of Kemper Corporation's (NYSE:KMPR) stock at an average buy price of US$62.34 over the last year may be disappointed by the recent 5.6% decrease in the stock. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$1.8m, which is not what they expected.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Kemper
The Independent Director Stuart Parker made the biggest insider purchase in the last 12 months. That single transaction was for US$1.5m worth of shares at a price of US$61.62 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$59.41). 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders paid US$1.9m for 31.00k shares. But they sold 20.49k shares for US$1.6m. In the last twelve months there was more buying than selling by Kemper insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Kemper is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Kemper Insiders Bought Stock Recently
We saw some Kemper insider buying shares in the last three months. They bought US$82k worth in that time. On the other hand, Senior VP & Deputy Chief Financial Officer Anastasios Omiridis sold US$48k worth of shares. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.
Insider Ownership of Kemper
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Kemper insiders own 4.5% of the company, worth about US$169m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Kemper Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Kemper insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Kemper and understanding them should be part of your investment process.
Of course Kemper 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.