We often see insiders buying up shares in companies that perform well over the long term. 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 South32 Limited (ASX:S32).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. 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.
The Last 12 Months Of Insider Transactions At South32
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
In the last twelve months South32 insiders were buying shares, but not selling. The average buy price was around AU$3.38. These transactions suggest that insiders have considered the current price of AU$2.75 attractive. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
South32 Insiders Bought Stock Recently
There was some insider buying at South32 over the last quarter. Non-Independent Non-Executive Director Xolani Mkhwanazi purchased US$48k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does South32 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. South32 insiders own about AU$25m worth of shares. That equates to 0.2% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At South32 Tell Us?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in South32 and their transactions don't cause us concern. Of course, the future is what matters most. So if you are interested in South32, you should check out this free report on analyst forecasts for the company.
But note: South32 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.