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Insider Buying: Thomas Gorman Just Spent AU$52k On Sims Limited (ASX:SGM) Shares

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Simply Wall St
·3 min read
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Even if it's not a huge purchase, we think it was good to see that Thomas Gorman, a Sims Limited (ASX:SGM) insider, recently shelled out AU$52k to buy stock, at AU$13.11 per share. Nevertheless, it only increased their shareholding by a minuscule percentage, and it wasn't a massive purchase by absolute value, either.

See our latest analysis for Sims

The Last 12 Months Of Insider Transactions At Sims

In fact, the recent purchase by Thomas Gorman was the biggest purchase of Sims shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$13.77. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Sims insiders decided to buy shares at close to current prices.

In the last twelve months Sims insiders were buying shares, but not selling. Their average price was about AU$10.80. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price of AU$13.77. 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!

insider-trading-volume
insider-trading-volume

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).

Insider Ownership of Sims

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.4% of Sims shares, worth about AU$10m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Sims Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Sims insiders are well aligned, and that they may think the share price is too low. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Sims 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.

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 (at) simplywallst.com.