Insiders who acquired R3.72m worth of The SPAR Group Ltd's( JSE:SPP ) stock at an average price of R93.80 in the past 12 months may be dismayed by the recent 15% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth R1.93m, which is not great.
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.
SPAR Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Officer Angelo Swartz for R3.7m worth of shares, at about R93.80 per share. That means that an insider was happy to buy shares at above the current price of R48.72. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Angelo Swartz was the only individual insider to buy shares in the last twelve months.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for SPAR Group
SPAR Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does SPAR Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data isn't picking up on much insider ownership at SPAR Group, though insiders do hold about R2.5m worth of shares. This level of insider ownership is notably low, and not very encouraging.
So What Do The SPAR Group Insider Transactions Indicate?
The fact that there have been no SPAR Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if SPAR Group insiders bought more shares in the company. 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. Case in point: We've spotted 3 warning signs for SPAR Group you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere.So take a peek at this free list of interesting 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.
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