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Vulcan Steel Limited (ASX:VSL) insiders placed bullish bets worth NZ$2.3m in the last 12 months

·3 min read

Over the last year, a good number of insiders have significantly increased their holdings in Vulcan Steel Limited (ASX:VSL). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

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.

See our latest analysis for Vulcan Steel

The Last 12 Months Of Insider Transactions At Vulcan Steel

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Peter Wells for AU$2.3m worth of shares, at about AU$9.12 per share. That means that an insider was happy to buy shares at above the current price of AU$7.26. 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.

Over the last year, we can see that insiders have bought 254.00k shares worth AU$2.3m. But they sold 60.00k shares for AU$521k. In the last twelve months there was more buying than selling by Vulcan Steel insiders. 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!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Vulcan Steel Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Vulcan Steel. In that time, Independent Non-Executive Director Philippa Greenwood dumped AU$521k worth of shares. On the flip side, Independent Non-Executive Director Carolyn Steele spent AU$34k on purchasing shares. Generally this level of net selling might be considered a bit bearish.

Does Vulcan Steel 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. Vulcan Steel insiders own about AU$362m worth of shares (which is 38% 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.

What Might The Insider Transactions At Vulcan Steel Tell Us?

Unfortunately, there has been more insider selling of Vulcan Steel stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. 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. For example, Vulcan Steel has 5 warning signs (and 3 which make us uncomfortable) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

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