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As IPH Limited (ASX:IPH) gains 3.7%, insiders who bought last year may be wishing they had bet higher

·3 min read

Insiders who bought IPH Limited (ASX:IPH) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$75m as a result of the stock's 3.7% gain over the same period. As a result, their original purchase of AU$75k worth of stock is now worth AU$75k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for IPH

The Last 12 Months Of Insider Transactions At IPH

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Jingmin Qian for AU$75k worth of shares, at about AU$9.37 per share. That implies that an insider found the current price of AU$9.42 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for IPH share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Jingmin Qian.

You can see the insider transactions (by companies and 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!


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

Does IPH 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 our data, it seems that IPH insiders own 0.6% of the company, worth about AU$11m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.

So What Do The IPH Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in IPH shares, given these transactions (along with notable insider ownership of the company). 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 1 warning sign for IPH you should be aware of.

But note: IPH 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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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