It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell iSelect Limited (ASX:ISU), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for iSelect
The Last 12 Months Of Insider Transactions At iSelect
While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.
In the last twelve months insiders paid AU$166k for 285k shares purchased. While iSelect insiders bought shares last year, they didn't sell. They paid about AU$0.58 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of AU$0.60. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
iSelect is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at iSelect Have Bought Stock Recently
It's good to see that iSelect insiders have made notable investments in the company's shares. Overall, 2 insiders shelled out AU$78k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own AU$1.9m worth of iSelect stock, about 1.4% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. I generally like to see higher levels of ownership.