Potential LawFinance Limited (ASX:LAW) shareholders may wish to note that the CEO, MD & Director, Daniel Kleijn, recently bought AU$146k worth of stock, paying AU$0.27 for each share. That certainly has us anticipating the best, especially since they thusly increased their own holding by 1,019%, potentially signalling some real optimism.
The Last 12 Months Of Insider Transactions At LawFinance
In fact, the recent purchase by Daniel Kleijn was the biggest purchase of LawFinance shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than AU$0.20 (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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
LawFinance insiders may have bought shares in the last year, but they didn't sell any. 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!
LawFinance is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of LawFinance
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. It appears that LawFinance insiders own 15% of the company, worth about AU$1.5m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The LawFinance Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of LawFinance we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing LawFinance. Case in point: We've spotted 6 warning signs for LawFinance you should be aware of, and 5 of these are a bit unpleasant.
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, 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.