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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Western Areas Limited (ASX:WSA), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
The Last 12 Months Of Insider Transactions At Western Areas
In the last twelve months, the biggest single sale by an insider was when the MD, CEO & Director, Daniel Lougher, sold AU$341k worth of shares at a price of AU$2.73 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (AU$2.18). So it is hard to draw any strong conclusion from it. Notably Daniel Lougher was also the biggest buyer, having purchased AU$48k worth of shares.
Over the last year, we can see that insiders have bought 20220 shares worth AU$48k. But insiders sold 282k shares worth AU$744k. All up, insiders sold more shares in Western Areas than they bought, over the last year. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Western Areas
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Western Areas insiders own 0.6% of the company, worth about AU$3.6m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Western Areas Insiders?
The fact that there have been no Western Areas insider transactions recently certainly doesn't bother us. The insider transactions at Western Areas are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Western Areas.
But note: Western Areas 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.
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 firstname.lastname@example.org. 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.