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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 Great Western Exploration Limited (ASX:GTE), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Great Western Exploration
The Last 12 Months Of Insider Transactions At Great Western Exploration
Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Grey Egerton-Warburton for AU$300k worth of shares, at about AU$0.032 per share. That implies that an insider found the current price of AU$0.035 per share to be enticing. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Great Western Exploration insiders decided to buy shares at close to current prices.
Great Western Exploration insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Great Western Exploration 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Great Western Exploration insiders own 26% of the company, worth about AU$3.1m. 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 Great Western Exploration Tell Us?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Great Western Exploration and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Great Western Exploration. To that end, you should learn about the 6 warning signs we've spotted with Great Western Exploration (including 4 which are a bit concerning).