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Quite a few insiders have dramatically grown their holdings in KGL Resources Limited (ASX:KGL) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for KGL Resources
KGL Resources Insider Transactions Over The Last Year
The Executive Chairman Denis Wood made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.6m worth of shares at a price of AU$0.12 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.15. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
KGL Resources insiders may have bought shares in the last year, but they didn't sell any. 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 always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. From our data, it seems that KGL Resources insiders own 11% of the company, worth about AU$9.5m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The KGL Resources Insider Transactions Indicate?
The fact that there have been no KGL Resources insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if KGL Resources insiders bought more shares in the company. While we like knowing 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 KGL Resources (3 shouldn't be ignored!) and we strongly recommend you look at these before investing.