It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Kelly Partners Group Holdings Limited's (ASX:KPG) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Kelly Partners Group Holdings Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Director Ada Wing Poon for AU$138k worth of shares, at about AU$3.80 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$3.88. That means they have been optimistic about the company in the past, though they may have changed their mind. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders purchased 77.63k shares for AU$300k. On the other hand they divested 44.14k shares, for AU$165k. In the last twelve months there was more buying than selling by Kelly Partners Group Holdings insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Kelly Partners Group Holdings Insiders Are Selling The Stock
We have seen a bit of insider selling at Kelly Partners Group Holdings, over the last three months. AU$115k worth of shares were sold by Founder Brett Kelly. But AU$83k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of Kelly Partners Group Holdings
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Kelly Partners Group Holdings insiders own 57% of the company, worth about AU$99m. 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 Does This Data Suggest About Kelly Partners Group Holdings Insiders?
Insider selling has just outweighed insider buying in the last three months. But the difference is small, and thus, not concerning. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Kelly Partners Group Holdings insiders think the business has merit. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Kelly Partners Group Holdings and we suggest you have a look.
Of course Kelly Partners Group Holdings 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, but not derivative transactions.
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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.