Investors who take an interest in Transaction Capital Limited (JSE:TCP) should definitely note that insider Albertinah Kekana recently paid R39.31 per share to buy R4.7m worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 1,500%, potentially signalling some real optimism.
Check out our latest analysis for Transaction Capital
Transaction Capital Insider Transactions Over The Last Year
Notably, that recent purchase by Albertinah Kekana is the biggest insider purchase of Transaction Capital shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of R38.57. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. 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. Albertinah Kekana 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!
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
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Transaction Capital insiders own about R4.4b worth of shares (which is 15% 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 Transaction Capital 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Transaction Capital. 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. Be aware that Transaction Capital is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...