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 we'll take a look at whether insiders have been buying or selling shares in Victory Offices Limited (ASX:VOL).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
The Last 12 Months Of Insider Transactions At Victory Offices
The insider Shane Tanner made the biggest insider purchase in the last 12 months. That single transaction was for AU$66k worth of shares at a price of AU$0.33 each. That means that an insider was happy to buy shares at above the current price of AU$0.17. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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.
While Victory Offices insiders bought shares during the last year, they didn't sell. 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!
Victory Offices is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Victory Offices
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Victory Offices insiders own 2.0% of the company, worth about AU$293k. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
So What Does This Data Suggest About Victory Offices Insiders?
The fact that there have been no Victory Offices insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Victory Offices stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Victory Offices. Our analysis shows 4 warning signs for Victory Offices (2 are a bit unpleasant!) and we strongly recommend you look at these before investing.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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