Positive Signs As Multiple Insiders Buy Kip McGrath Education Centres Stock
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Kip McGrath Education Centres Limited (ASX:KME), that sends out a positive 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, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Kip McGrath Education Centres
Kip McGrath Education Centres Insider Transactions Over The Last Year
The MD, CEO & Executive Director Storm McGrath made the biggest insider purchase in the last 12 months. That single transaction was for AU$86k worth of shares at a price of AU$0.43 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.49. 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.
While Kip McGrath Education Centres insiders bought shares during the last year, they didn't sell. 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!
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 Kip McGrath Education Centres 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 29% of Kip McGrath Education Centres shares, worth about AU$8.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Kip McGrath Education Centres Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Kip McGrath Education Centres shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Kip McGrath Education Centres and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kip McGrath Education Centres. Our analysis shows 3 warning signs for Kip McGrath Education Centres (1 is a bit concerning!) and we strongly recommend you look at them before investing.
But note: Kip McGrath Education Centres 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.
