Insiders' AU$12.1m Investments In Red Following 360 Capital Group's AU$5.9m Dip In Market Value

Insiders who bought AU$12.1m worth of 360 Capital Group Limited's (ASX:TGP) stock at an average buy price of AU$0.31 over the last year may be disappointed by the recent 10.0% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth AU$10.5m which is not ideal.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At 360 Capital Group

Notably, that recent purchase by Founder & Executive Chairman Tony Pitt was not the only time they bought 360 Capital Group shares this year. Earlier in the year, they paid AU$0.31 per share in a AU$5.0m purchase. That means that even when the share price was higher than AU$0.27 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays 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.

Happily, we note that in the last year insiders paid AU$12m for 38.89m shares. On the other hand they divested 3.06m shares, for AU$948k. In total, 360 Capital Group insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Check out our latest analysis for 360 Capital Group

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Insiders At 360 Capital Group Have Bought Stock Recently

At 360 Capital Group,over the last quarter, we have observed quite a lot more insider buying than insider selling. Founder & Executive Chairman Tony Pitt spent AU$12m on stock. But we did see insider selling worth AU$948k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that 360 Capital Group insiders own 82% of the company, worth about AU$43m. 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 360 Capital Group Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about 360 Capital Group. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that 360 Capital Group is showing 5 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

Of course 360 Capital Group 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.