Possible Turnaround For State Gas Insiders, Still Down AU$624k

Insiders who purchased AU$1.84m worth of State Gas Limited (ASX:GAS) shares over the past year recouped some of their losses after price gained 18% last week. However, total losses seen by insiders are still AU$624k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for State Gas

The Last 12 Months Of Insider Transactions At State Gas

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Philip St Baker for AU$362k worth of shares, at about AU$0.045 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.053. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months State Gas insiders were buying shares, but not selling. They paid about AU$0.08 on average. These transactions suggest that insiders have considered the current price attractive. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At State Gas Have Bought Stock Recently

It's good to see that State Gas insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$740k worth of shares. This is a positive in our book as it implies some confidence.

Does State Gas Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. State Gas insiders own about AU$5.1m worth of shares. That equates to 26% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At State Gas Tell Us?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest State Gas insiders are well aligned, and that they may think the share price is too low. 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 State Gas is showing 4 warning signs in our investment analysis, and 2 of those shouldn't be ignored...

But note: State Gas may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.