Insiders Buying Kip McGrath Education Centres Might Wish They Invested More, Stock Gains 20%

Insiders who bought Kip McGrath Education Centres Limited (ASX:KME) stock in the last 12 months were richly rewarded last week. The company's market value increased by AU$5.1m as a result of the stock's 20% gain over the same period. As a result, the stock they originally bought for AU$150.5k is now worth AU$189.0k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Kip McGrath Education Centres

Kip McGrath Education Centres Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when MD, CEO & Executive Director Storm McGrath bought AU$86k worth of shares at a price of AU$0.43 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.54), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Kip McGrath Education Centres insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Kip McGrath Education Centres is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Kip McGrath Education Centres insiders own about AU$8.8m worth of shares. That equates to 29% of the company. 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 Kip McGrath Education Centres Insider Transactions Indicate?

The fact that there have been no Kip McGrath Education Centres insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Kip McGrath Education Centres and we see no evidence to suggest they are worried about the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Kip McGrath Education Centres (1 is potentially serious!) that we believe deserve your full attention.

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 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.