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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Ansell Limited (ASX:ANN), that sends out a positive message to the company's shareholders.
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.
View our latest analysis for Ansell
Ansell Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Morten Falkenberg bought AU$130k worth of shares at a price of AU$26.25 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$28.09. 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. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Ansell share holders is that insiders were buying at near the current price.
Ansell insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Ansell 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.
Insider Ownership Of Ansell
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. Ansell insiders own about AU$24m worth of shares. That equates to 0.7% 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.
So What Does This Data Suggest About Ansell Insiders?
It doesn't really mean much that no insider has traded Ansell shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Ansell insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Ansell has 2 warning signs we think you should be aware of.