We note that the VIP Gloves Limited (ASX:VIP) Independent Non-Executive Chairman, Kai Wong, recently sold AU$72k worth of stock for AU$0.036 per share. It might not be a huge sale, but it did reduce their holding size 39%, hardly encouraging.
VIP Gloves Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Wee Chen bought AU$134k worth of shares at a price of AU$0.077 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.031). 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. To us, it's very important to consider the price insiders pay for shares. 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.
Over the last year, we can see that insiders have bought 2.74m shares worth AU$209k. On the other hand they divested 2.00m shares, for AU$72k. In the last twelve months there was more buying than selling by VIP Gloves insiders. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does VIP Gloves 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. VIP Gloves insiders own about AU$10m worth of shares (which is 43% of the company). 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 VIP Gloves Insiders?
An insider hasn't bought VIP Gloves stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that VIP Gloves has 5 warning signs and it would be unwise to ignore them.
But note: VIP Gloves 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, but not derivative transactions.
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.
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