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Investors who take an interest in State Gas Limited (ASX:GAS) should definitely note that the Non-executive Director, Philip St Baker, recently paid AU$0.05 per share to buy AU$284k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 50%, potentially signalling some real optimism.
Check out our latest analysis for State Gas
State Gas Insider Transactions Over The Last Year
Notably, that recent purchase by Non-executive Director Philip St Baker was not the only time they bought State Gas shares this year. Earlier in the year, they paid AU$0.15 per share in a AU$350k purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.045). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for 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.
State Gas insiders may have bought shares in the last year, but they didn't sell any. They paid about AU$0.099 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
State Gas is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. State Gas insiders own about AU$3.1m worth of shares. That equates to 21% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At State Gas Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of State Gas we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing State Gas. For example, State Gas has 4 warning signs (and 3 which are concerning) we think you should know about.