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Whilst it may not be a huge deal, we thought it was good to see that the SHAPE Australia Corporation Limited (ASX:SHA) Chairman of the Board, Greg Miles, recently bought AU$81k worth of stock, for AU$2.70 per share. Even though that isn't a massive buy, it did increase their holding by 150%, which is arguably a good sign.
Check out our latest analysis for SHAPE Australia
SHAPE Australia Insider Transactions Over The Last Year
Notably, that recent purchase by Greg Miles is the biggest insider purchase of SHAPE Australia shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is AU$2.70. 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. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.
SHAPE Australia insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$2.23. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!
SHAPE Australia 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.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. SHAPE Australia insiders own 58% of the company, currently worth about AU$131m based on the recent share price. 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 Do The SHAPE Australia Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about SHAPE Australia. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that SHAPE Australia has 1 warning sign and it would be unwise to ignore this.