Are Insiders Buying intelliHR Limited (ASX:IHR) Stock?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in intelliHR Limited (ASX:IHR).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for intelliHR

intelliHR Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the MD, CEO & Executive Director, Robert Bromage, for AU$393k worth of shares, at about AU$0.26 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.45. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 6.6% of Robert Bromage's stake. Robert Bromage was the only individual insider to sell shares in the last twelve months. Notably Robert Bromage was also the biggest buyer, having purchased AU$498k worth of shares.

In the last twelve months insiders purchased 6.73m shares for AU$498k. On the other hand they divested 1.50m shares, for AU$393k. In the last twelve months there was more buying than selling by intelliHR insiders. 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!

intelliHR 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.

Does intelliHR 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. I reckon it's a good sign if insiders own a significant number of shares in the company. intelliHR insiders own about AU$22m worth of shares. That equates to 18% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The intelliHR Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in intelliHR and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing intelliHR. To that end, you should learn about the 5 warning signs we've spotted with intelliHR (including 3 which shouldn't be ignored).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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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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