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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Oakajee Corporation Limited (ASX:OKJ), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Check out our latest analysis for Oakajee
The Last 12 Months Of Insider Transactions At Oakajee
Over the last year, we can see that the biggest insider purchase was by insider Cesare Ceniviva for AU$160k worth of shares, at about AU$0.08 per share. That means that an insider was happy to buy shares at above the current price of AU$0.052. 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.
Happily, we note that in the last year insiders bought 3.0m shares for a total of AU$201k. Oakajee insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around AU$0.066. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Oakajee is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Oakajee Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Oakajee. Not only was there no selling that we can see, but they collectively bought AU$201k worth of shares. That shows some optimism about the company's future.
Does Oakajee Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Oakajee insiders own about AU$1.6m worth of shares. That equates to 33% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.