Hopeful Week For Insiders Who Bought NZ$843.9k Of Straker Stock

Insiders who bought NZ$843.9k worth of Straker Limited (ASX:STG) stock in the last year recovered part of their losses as the stock rose by 13% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled NZ$262k since the time of purchase.

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.

View our latest analysis for Straker

The Last 12 Months Of Insider Transactions At Straker

The insider Scobie Dickinson Ward made the biggest insider purchase in the last 12 months. That single transaction was for AU$764k worth of shares at a price of AU$0.76 each. That means that even when the share price was higher than AU$0.52 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Straker insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Straker 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.

Straker Insiders Bought Stock Recently

It's good to see that Straker insiders have made notable investments in the company's shares. Specifically, insider Scobie Dickinson Ward bought AU$764k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Straker insiders own 41% of the company, worth about AU$14m. 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 Straker Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Straker. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Straker. In terms of investment risks, we've identified 2 warning signs with Straker and understanding them should be part of your investment process.

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.