Positive Signs As Multiple Insiders Buy Shine Justice Stock
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Shine Justice Ltd (ASX:SHJ), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Shine Justice
The Last 12 Months Of Insider Transactions At Shine Justice
In the last twelve months, the biggest single purchase by an insider was when Co-Founder Simon Morrison bought AU$94k worth of shares at a price of AU$0.72 per share. That means that even when the share price was higher than AU$0.59 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Shine Justice insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Shine Justice is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have Shine Justice Insiders Traded Recently?
Independent Chairman of the Board Graham Bradley bought just AU$6.9k worth of shares in that time. That's not much at all. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Shine Justice insiders own about AU$56m worth of shares (which is 55% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Shine Justice Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Shine Justice insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Shine Justice has 2 warning signs and it would be unwise to ignore them.
But note: Shine Justice 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
