Over the last year, a good number of insiders have significantly increased their holdings in Gowing Bros. Limited( ASX:GOW ). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Gowing Bros
Over the last year, we can see that the biggest insider purchase was by insider Philip Feitelson for AU$1.3m worth of shares, at about AU$2.32 per share. That means that even when the share price was higher than AU$2.22 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
While Gowing Bros 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Gowing Bros
Gowing Bros is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations,this free list of growing companies with recent insider purchasing, could be just the ticket.
Gowing Bros Insiders Bought Stock Recently
Over the last quarter, Gowing Bros insiders have spent a meaningful amount on shares. insider Philip Feitelson spent AU$1.3m on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of Gowing Bros
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Gowing Bros insiders own 54% of the company, currently worth about AU$65m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Gowing Bros Tell Us?
It's certainly positive 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Gowing Bros. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gowing Bros. Be aware that Gowing Bros is showing 3 warning signs in our investment analysis , and 2 of those are concerning...
Of course Gowing Bros may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature.
We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.
It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
