Even if it's not a huge purchase, we think it was good to see that Bruce MacDiarmid, the Independent Non-Executive Director of Qualitas Limited (ASX:QAL) recently shelled out AU$132k to buy stock, at AU$3.30 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
The Last 12 Months Of Insider Transactions At Qualitas
Notably, that recent purchase by Bruce MacDiarmid is the biggest insider purchase of Qualitas shares that we've seen in the last year. That implies that an insider found the current price of AU$3.38 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
Qualitas insiders may have bought shares in the last year, but they didn't sell any. 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!
View our latest analysis for Qualitas
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Does Qualitas 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. We usually like to see fairly high levels of insider ownership. It's great to see that Qualitas insiders own 28% of the company, worth about AU$282m. 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 Does This Data Suggest About Qualitas Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Qualitas insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Qualitas. Case in point: We've spotted 1 warning sign for Qualitas you should be aware of.
Of course Qualitas may not be the best stock to buy. So you may wish to see this free collection of high quality 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.