Did Washington H. Soul Pattinson and Company Limited (ASX:SOL) Insiders Buy Up More Shares?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Washington H. Soul Pattinson and Company Limited (ASX:SOL).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

Check out our latest analysis for Washington H. Soul Pattinson

The Last 12 Months Of Insider Transactions At Washington H. Soul Pattinson

In the last twelve months, the biggest single purchase by an insider was when MD, CEO & Executive Director Todd Barlow bought AU$3.0m worth of shares at a price of AU$28.98 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$28.36). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 474.41k shares worth AU$11m. But they sold 14.00k shares for AU$425k. In total, Washington H. Soul Pattinson insiders bought more than they sold over the last year. The average buy price was around AU$23.19. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Washington H. Soul Pattinson is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Washington H. Soul Pattinson Insiders Bought Stock Recently

At Washington H. Soul Pattinson,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent AU$3.8m on shares. But Non-Executive Independent Director Warwick Negus sold shares worth AU$425k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Washington H. Soul Pattinson insiders own 6.6% of the company, worth about AU$439m. 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 Do The Washington H. Soul Pattinson Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Washington H. Soul Pattinson insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 2 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Washington H. Soul Pattinson.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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, but not derivative transactions.

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This article by Simply Wall St is general in nature. 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.
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