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 New Zealand Rural Land Company Limited (NZSE:NZL), that sends out a positive 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, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At New Zealand Rural Land
In the last twelve months, the biggest single purchase by an insider was when Director & Management Company Representative Christopher Swasbrook bought NZ$638k worth of shares at a price of NZ$1.10 per share. That implies that an insider found the current price of NZ$1.12 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
While New Zealand Rural Land insiders bought shares during the last year, they didn't sell. 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!
New Zealand Rural Land 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.
New Zealand Rural Land Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at New Zealand Rural Land. Overall, five insiders shelled out NZ$222k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does New Zealand Rural Land Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that New Zealand Rural Land insiders own 11% of the company, worth about NZ$14m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At New Zealand Rural Land Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in New Zealand Rural Land shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 8 warning signs for New Zealand Rural Land (2 can't be ignored) you should be aware of.
Of course New Zealand Rural Land 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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