Investors who take an interest in Kits Eyecare Ltd. (TSE:KITS) should definitely note that the Co-Founder, Roger Hardy, recently paid CA$5.00 per share to buy CA$275k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
Check out our latest analysis for Kits Eyecare
Kits Eyecare Insider Transactions Over The Last Year
Notably, that recent purchase by Roger Hardy is the biggest insider purchase of Kits Eyecare shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of CA$5.00. 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. In our view, the price an insider pays for shares is very important. 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.
In the last twelve months Kits Eyecare insiders were buying shares, but not selling. The average buy price was around CA$4.04. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership Of Kits Eyecare
For a common shareholder, it is worth checking how many shares are held by company 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. Kits Eyecare insiders own 44% of the company, currently worth about CA$70m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Kits Eyecare Insiders?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Kits Eyecare insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Kits Eyecare.