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WA Kaolin Limited (ASX:WAK) shareholders (or potential shareholders) will be happy to see that the Non-Executive Director, Kenneth Hall, recently bought a whopping AU$2.8m worth of stock, at a price of AU$0.06. That purchase boosted their holding by 83%, which makes us wonder if the move was inspired by quietly confident deeply-felt optimism.
Check out our latest analysis for WA Kaolin
The Last 12 Months Of Insider Transactions At WA Kaolin
In fact, the recent purchase by Kenneth Hall was the biggest purchase of WA Kaolin shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.052. 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. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While WA Kaolin insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.047. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. You can see the insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
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. WA Kaolin insiders own about AU$9.4m worth of shares. That equates to 40% of the company. 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 Does This Data Suggest About WA Kaolin Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest WA Kaolin insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing WA Kaolin. For example, WA Kaolin has 4 warning signs (and 1 which is significant) we think you should know about.