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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Elders Limited (ASX:ELD), it sends a favourable message to the company's 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.
See our latest analysis for Elders
The Last 12 Months Of Insider Transactions At Elders
Over the last year, we can see that the biggest insider purchase was by CEO, MD & Executive Director Mark Allison for AU$586k worth of shares, at about AU$7.85 per share. That means that an insider was happy to buy shares at above the current price of AU$6.90. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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.
Elders insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and 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!
Elders is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Elders Insiders Bought Stock Recently
Over the last quarter, Elders insiders have spent a meaningful amount on shares. In total, insiders bought AU$840k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Elders 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. We usually like to see fairly high levels of insider ownership. It appears that Elders insiders own 1.7% of the company, worth about AU$23m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Elders Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Elders shares, given these transactions (along with notable insider ownership of the company). 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. Our analysis shows 5 warning signs for Elders (2 are significant!) and we strongly recommend you look at them before investing.