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Trade Alert: The Independent Non-Executive Director Of Prospech Limited (ASX:PRS), John Levings, Has Just Spent AU$303k Buying 745% More Shares

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Investors who take an interest in Prospech Limited (ASX:PRS) should definitely note that the Independent Non-Executive Director, John Levings, recently paid AU$0.08 per share to buy AU$303k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 745%.

Check out our latest analysis for Prospech

The Last 12 Months Of Insider Transactions At Prospech

In fact, the recent purchase by John Levings was the biggest purchase of Prospech shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.06. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. John Levings was the only individual insider to buy during the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

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.

Insider Ownership of Prospech

Many investors like to check how much of a company is owned by 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. Insiders own 37% of Prospech shares, worth about AU$2.0m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Prospech Tell Us?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Prospech we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example - Prospech has 4 warning signs we think you should be aware of.

Of course Prospech may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.