Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Select Harvests Limited( ASX:SHV ), it sends a favourable 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.
Select Harvests Insider Transactions Over The Last Year
The Independent Non-Executive Director Michelle Somerville made the biggest insider purchase in the last 12 months. That single transaction was for AU$90k worth of shares at a price of AU$4.51 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$3.76). 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Select Harvests insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Check out our latest analysis for Select Harvests
Select Harvests 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.
Insider Ownership Of Select Harvests
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Our data suggests Select Harvests insiders own 0.8% of the company, worth about AU$4.5m. I generally like to see higher levels of ownership.
So What Do The Select Harvests Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Select Harvests shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Select Harvests stock. Of course, the future is what matters most. So if you are interested in Select Harvests, you should check out this free report on analyst forecasts for the company .
But note: Select Harvests may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
