Quite a few insiders have dramatically grown their holdings in Transaction Capital Limited (JSE:TCP) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for Transaction Capital
Transaction Capital Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Co-Founder Jonathan Jawno for R20m worth of shares, at about R13.19 per share. That means that an insider was happy to buy shares at above the current price of R7.54. 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. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Transaction Capital insiders may have bought shares in the last year, but they didn't sell any. 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.
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. We usually like to see fairly high levels of insider ownership. It appears that Transaction Capital insiders own 15% of the company, worth about R867m. 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 Transaction Capital Tell Us?
The fact that there have been no Transaction Capital insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Transaction Capital insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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. To that end, you should learn about the 3 warning signs we've spotted with Transaction Capital (including 2 which don't sit too well with us).