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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in New Hope Corporation Limited's (ASX:NHC) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
View our latest analysis for New Hope
The Last 12 Months Of Insider Transactions At New Hope
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Thomas Charles Millner bought AU$469k worth of shares at a price of AU$4.69 per share. That means that an insider was happy to buy shares at around the current price of AU$4.92. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the New Hope insiders decided to buy shares at close to current prices.
New Hope 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!
New Hope is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Does New Hope Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. New Hope insiders own about AU$62m worth of shares. That equates to 1.5% of the company. 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 New Hope Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders own shares in New Hope and we see no evidence to suggest they are worried about the future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for New Hope (of which 1 shouldn't be ignored!) you should know about.