Should You Take Comfort From Insider Transactions At Ingenia Communities Group (ASX:INA)?

By
Simply Wall St
Published
January 18, 2021
ASX:INA

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 Ingenia Communities Group (ASX:INA).

What Is Insider Buying?

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, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.

View our latest analysis for Ingenia Communities Group

The Last 12 Months Of Insider Transactions At Ingenia Communities Group

In the last twelve months, the biggest single purchase by an insider was when Independent Deputy Chairman Robert Morrison bought AU$101k worth of shares at a price of AU$4.59 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$4.73. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months Ingenia Communities Group insiders were buying shares, but not selling. They paid about AU$3.80 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:INA Insider Trading Volume January 18th 2021

Ingenia Communities Group 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.

Ingenia Communities Group Insiders Bought Stock Recently

Over the last quarter, Ingenia Communities Group insiders have spent a meaningful amount on shares. Specifically, Independent Deputy Chairman Robert Morrison bought AU$101k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does Ingenia Communities Group Boast High Insider Ownership?

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.8% of Ingenia Communities Group shares, worth about AU$13m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Ingenia Communities Group Insider Transactions Indicate?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Insiders likely see value in Ingenia Communities Group shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Ingenia Communities Group and we suggest you have a look.

But note: Ingenia Communities 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.

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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