Insiders who bought AU$465.3k worth of East 33 Limited (ASX:E33) stock in the last year have seen some of their losses recouped as the stock gained 25% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling AU$72k.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for East 33
The Last 12 Months Of Insider Transactions At East 33
Over the last year, we can see that the biggest insider purchase was by insider Anthony Hall for AU$436k worth of shares, at about AU$0.03 per share. That means that an insider was happy to buy shares at above the current price of AU$0.025. 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. 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.
While East 33 insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
East 33 is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders At East 33 Have Bought Stock Recently
There was some insider buying at East 33 over the last quarter. Insiders bought AU$29k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that East 33 insiders own 47% of the company, worth about AU$6.1m. 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 East 33 Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, East 33 insiders feel good about the company's 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. In terms of investment risks, we've identified 3 warning signs with East 33 and understanding them should be part of your investment process.