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Insider Buying: The Incitec Pivot Limited (ASX:IPL) MD, CEO & Executive Director Just Bought 21% More Shares

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Potential Incitec Pivot Limited (ASX:IPL) shareholders may wish to note that the MD, CEO & Executive Director, Jeanne Johns, recently bought AU$199k worth of stock, paying AU$1.84 for each share. That's a very solid buy in our book, and increased their holding by a noteworthy 21%.

See our latest analysis for Incitec Pivot

Incitec Pivot Insider Transactions Over The Last Year

Notably, that recent purchase by MD, CEO & Executive Director Jeanne Johns was not the only time they bought Incitec Pivot shares this year. They previously made an even bigger purchase of AU$499k worth of shares at a price of AU$3.17 per share. That means that even when the share price was higher than AU$1.93 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Jeanne Johns was the only individual insider to buy shares in the last twelve months.

Jeanne Johns purchased 468.88k shares over the year. The average price per share was AU$2.34. You can see the insider transactions (by 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!

ASX:IPL Insider Trading Volume July 3rd 2020
ASX:IPL Insider Trading Volume July 3rd 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Incitec Pivot 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. 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 Incitec Pivot stock, about 0.1% of the company. We consider this fairly low insider ownership.

So What Does This Data Suggest About Incitec Pivot Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. 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 Incitec Pivot stock. 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. Case in point: We've spotted 2 warning signs for Incitec Pivot you should be aware of, and 1 of them is a bit concerning.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.