Stock Analysis

Insiders who sold IVE Group Limited's (ASX:IGL) earlier year may find some solace in the 11% drop

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Even though IVE Group Limited (ASX:IGL) has fallen by 11% over the past week , insiders who sold AU$10m worth of stock over the past year have had less luck. The average selling price of AU$2.25 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At IVE Group

The Executive Chairman, Geoff Selig, made the biggest insider sale in the last 12 months. That single transaction was for AU$10m worth of shares at a price of AU$2.25 each. That means that even when the share price was below the current price of AU$2.44, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 35% of Geoff Selig's holding. Geoff Selig was the only individual insider to sell over the last year.

Over the last year, we can see that insiders have bought 3.25m shares worth AU$6.8m. On the other hand they divested 4.50m shares, for AU$10m. You can see a visual depiction of insider transactions (by companies and 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!

ASX:IGL Insider Trading Volume March 15th 2023

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Does IVE Group 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 18% of IVE Group shares, worth about AU$65m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About IVE Group Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by IVE Group insiders. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IVE Group. While conducting our analysis, we found that IVE Group has 3 warning signs and it would be unwise to ignore them.

Of course IVE Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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