Bullish Star Entertainment Group Insider Buying Worth AU$49.1m Yet To Pay Off

The recent 32% drop in The Star Entertainment Group Limited's (ASX:SGR) stock could come as a blow to insiders who purchased AU$49.1m worth of stock at an average buy price of AU$0.48 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$13.4m.

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 Star Entertainment Group

The Last 12 Months Of Insider Transactions At Star Entertainment Group

In the last twelve months, the biggest single purchase by an insider was when insider Bruce Mathieson bought AU$31m worth of shares at a price of AU$0.54 per share. That means that an insider was happy to buy shares at above the current price of AU$0.13. 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. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Bruce Mathieson was the only individual insider to buy during the last year.

Bruce Mathieson purchased 102.88m shares over the year. The average price per share was AU$0.48. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Star Entertainment Group is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Star Entertainment Group 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. Star Entertainment Group insiders own about AU$41m worth of shares. That equates to 11% 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.

What Might The Insider Transactions At Star Entertainment Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Star Entertainment Group and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Star Entertainment Group. You'd be interested to know, that we found 2 warning signs for Star Entertainment Group and we suggest you have a look.

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.