It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell K2fly Limited (ASX:K2F), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Check out our latest analysis for K2fly
The Last 12 Months Of Insider Transactions At K2fly
insider Paul Cozzi made the biggest insider purchase in the last 12 months. That single transaction was for AU$327k worth of shares at a price of AU$0.24 each. That means that even when the share price was higher than AU$0.19 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
Over the last year, we can see that insiders have bought 3.2m shares worth AU$567k. In the last twelve months K2fly insiders were buying shares, but not selling. The average buy price was around AU$0.18. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
K2fly Insiders Bought Stock Recently
There was some insider buying at K2fly over the last quarter. Insiders shelled out AU$27k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.