Insiders were net buyers of Olam Group Limited's( SGX:VC2 ) stock during the past year. That is, insiders bought more stock than they sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Olam Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Co-Founder Sunny George Verghese for S$496k worth of shares, at about S$0.99 per share. That means that even when the share price was higher than S$0.91 (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 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. Sunny George Verghese was the only individual insider to buy shares in the last twelve months.
Sunny George Verghese purchased 1.00m shares over the year. The average price per share was S$0.99. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Olam Group
There are plenty of other companies that have insiders buying up shares. You probably do notwant to miss this free list of undervalued small cap companies that insiders are buying.
Does Olam Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Olam Group insiders own about S$155m worth of shares (which is 4.5% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Olam Group Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Olam Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Olam Group insiders think the business has merit. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for Olam Group (of which 2 make us uncomfortable!) you should know about.
But note: Olam Group 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.
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