We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell IVE Group Limited (ASX:IGL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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IVE Group Insider Transactions Over The Last Year
Anthony Kieran Young made the biggest insider purchase in the last 12 months. That single transaction was for AU$1.0m worth of shares at a price of AU$2.05 each. That means that an insider was happy to buy shares at around the current price of AU$2.12. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it’s a good sign on balance, but keep in mind they may no longer see value. Happily, the IVE Group insider decided to buy shares at close to current prices. Anthony Kieran Young was the only individual insider to buy over the year. Notably Anthony Kieran Young was also the biggest seller, having sold AU$1.4m worth of shares.
All up, insiders sold more shares in IVE Group than they bought, over the last year. They sold for an average price of about AU$2.10. We don’t gain confidence from insider selling below the recent share price. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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IVE Group Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at IVE Group. In total, insiders sold AU$371k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of IVE Group
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. We usually like to see fairly high levels of insider ownership. It appears that IVE Group insiders own 14% of the company, worth about AU$45m. 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 IVE Group Tell Us?
Insiders sold IVE Group shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in IVE Group, you should check out this free report on analyst forecasts for the company.
But note: IVE Group 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.