Potential Wesfarmers Limited (ASX:WES) shareholders may wish to note that the Independent Non-Executive Director, Sharon Warburton, recently bought AU$192k worth of stock, paying AU$41.75 for each share. That certainly has us anticipating the best, especially since they thusly increased their own holding by 189%, potentially signalling some real optimism.
Wesfarmers Insider Transactions Over The Last Year
Notably, that recent purchase by Sharon Warburton is the biggest insider purchase of Wesfarmers shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is AU$42.47. That means they have been optimistic about the company in the past, though they may have changed their mind. 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 Wesfarmers insiders decided to buy shares at close to current prices.
While Wesfarmers insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Does Wesfarmers Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Wesfarmers insiders own about AU$114m worth of shares. That equates to 0.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Wesfarmers Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Wesfarmers insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Wesfarmers that deserve your attention before buying any shares.
Of course Wesfarmers 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. 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. Thank you for reading.