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When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Inghams Group Limited's (ASX:ING) instance, it's good news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Inghams Group Insider Transactions Over The Last Year
The Non-Executive Director Timothy Longstaff made the biggest insider purchase in the last 12 months. That single transaction was for AU$100k worth of shares at a price of AU$3.34 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$2.80). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.
Inghams Group insiders may have bought shares in the last year, but they didn't sell any. 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 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 Inghams Group Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Inghams Group. Not only was there no selling that we can see, but they collectively bought AU$181k worth of shares. This could be interpreted as suggesting a positive outlook.
Does Inghams Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own AU$4.1m worth of Inghams Group stock, about 0.4% of the company. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Inghams Group Tell Us?
It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Inghams Group stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Inghams Group (including 1 which doesn't sit too well with us).
But note: Inghams Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.