Insider Stock Buying Reaches AU$18.9m On Reece

Multiple insiders secured a larger position in Reece Limited (ASX:REH) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Reece

The Last 12 Months Of Insider Transactions At Reece

Over the last year, we can see that the biggest insider purchase was by Executive Director Leslie Wilson for AU$19m worth of shares, at about AU$18.83 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$27.71. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Reece insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Reece Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Reece. Independent Non-Executive Director Karen Lee Penrose shelled out AU$30k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Does Reece Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Reece insiders own about AU$2.3b worth of shares (which is 13% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Reece Insider Transactions Indicate?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Reece insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Reece.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.