Potential Simonds Group Limited (ASX:SIO) shareholders may wish to note that the Founder & Senior Company Advisor, Vallence Simonds, recently bought AU$644k worth of stock, paying AU$0.35 for each share. Although the purchase only increased their holding by 2.9%, it is still a solid purchase in our view.
The Last 12 Months Of Insider Transactions At Simonds Group
Notably, that recent purchase by Founder & Senior Company Advisor Vallence Simonds was not the only time they bought Simonds Group shares this year. Earlier in the year, they paid AU$0.35 per share in a AU$840k purchase. That means that an insider was happy to buy shares at around the current price of AU$0.39. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Simonds Group share holders is that an insider was buying at near the current price. Vallence Simonds was the only individual insider to buy shares in the last twelve months.
Vallence Simonds bought a total of 4.31m shares over the year at an average price of AU$0.34. 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!
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.
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. Simonds Group insiders own 46% of the company, currently worth about AU$26m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Simonds Group Tell Us?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Simonds Group insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Simonds Group has 3 warning signs we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.
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. 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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