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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Top Glove Corporation Bhd. (KLSE:TOPGLOV), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Top Glove Corporation Bhd
The Last 12 Months Of Insider Transactions At Top Glove Corporation Bhd
Over the last year, we can see that the biggest insider purchase was by Founder & Executive Chairman Wee Chai Lim for RM1.4m worth of shares, at about RM1.36 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being RM1.09). 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.
In the last twelve months Top Glove Corporation Bhd insiders were buying shares, but not selling. You can see the insider transactions (by companies and 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!
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
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Top Glove Corporation Bhd insiders own about RM2.6b worth of shares (which is 30% 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.
So What Does This Data Suggest About Top Glove Corporation Bhd Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Top Glove Corporation Bhd insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Top Glove Corporation Bhd you should know about.