We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Veris Limited (ASX:VRS).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Veris
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Thomas Lawrence bought AU$360k worth of shares at a price of AU$0.09 per share. That means that an insider was happy to buy shares at above the current price of AU$0.06. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Over the last year, we can see that insiders have bought 9.5m shares worth AU$1.0m. In the last twelve months Veris insiders were buying shares, but not selling. Their average price was about AU$0.11. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by 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!
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).
Veris Insiders Bought Stock Recently
There was some insider buying at Veris over the last quarter. Executive Director Brian Elton shelled out AU$57k for shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Does Veris Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 24% of Veris shares, worth about AU$5.2m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Veris Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Veris insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Veris, you should check out this free report on analyst forecasts for the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.