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Quite a few insiders have dramatically grown their holdings in Orora Limited (ASX:ORA) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Orora
Orora Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, MD & Director Brian Lowe bought AU$776k worth of shares at a price of AU$2.70 per share. That means that an insider was happy to buy shares at above the current price of AU$1.92. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Orora insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Does Orora 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Orora insiders have about 0.3% of the stock, worth approximately AU$6.5m. We consider this fairly low insider ownership.
So What Do The Orora Insider Transactions Indicate?
The fact that there have been no Orora 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 Orora insiders bought more shares in the company. While it's good to be aware of 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. At Simply Wall St, we've found that Orora has 4 warning signs (3 are a bit concerning!) that deserve your attention before going any further with your analysis.