We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell S2 Resources Ltd (ASX:S2R), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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.’
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The Last 12 Months Of Insider Transactions At S2 Resources
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders paid AU$147k for 1.4m shares purchased. In the last twelve months S2 Resources insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
S2 Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at S2 Resources Have Bought Stock Recently
Over the last quarter, S2 Resources insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$113k worth of shares. This makes one think the business has some good points.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that S2 Resources insiders own 6.5% of the company, worth about AU$1.8m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About S2 Resources Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that S2 Resources insiders are reasonably well aligned, and optimistic for the future. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But note: S2 Resources 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.