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Have Insiders Been Buying Incitec Pivot Limited (ASX:IPL) Shares?

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·3 min read
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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Incitec Pivot Limited (ASX:IPL).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Incitec Pivot

Incitec Pivot Insider Transactions Over The Last Year

The MD, CEO & Executive Director Jeanne Johns made the biggest insider purchase in the last 12 months. That single transaction was for AU$199k worth of shares at a price of AU$1.84 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$2.79. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Jeanne Johns bought 310.79k shares over the last 12 months at an average price of AU$1.92. You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
insider-trading-volume

Incitec Pivot is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Incitec Pivot Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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$3.8m worth of Incitec Pivot stock, about 0.07% of the company. We prefer to see high levels of insider ownership.

So What Does This Data Suggest About Incitec Pivot Insiders?

It doesn't really mean much that no insider has traded Incitec Pivot shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Incitec Pivot insiders are doubting the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 3 warning signs for Incitec Pivot that deserve your attention before buying any shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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.