How Much Are IRESS Limited (ASX:IRE) Insiders Spending On Buying Shares?

We often see insiders buying up shares in companies that perform well over the long term. 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 we'll take a look at whether insiders have been buying or selling shares in IRESS Limited (ASX:IRE).

What Is Insider Selling?

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 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. 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 IRESS

The Last 12 Months Of Insider Transactions At IRESS

The Independent Non-Executive Director Trudy Vonhoff made the biggest insider purchase in the last 12 months. That single transaction was for AU$133k worth of shares at a price of AU$12.05 each. That means that an insider was happy to buy shares at above the current price of AU$10.37. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While IRESS insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

IRESS 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.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that IRESS insiders own about AU$8.4m worth of shares (which is 0.4% of the company). Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At IRESS Tell Us?

It doesn't really mean much that no insider has traded IRESS shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think IRESS insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing IRESS. Our analysis shows 2 warning signs for IRESS (1 is potentially serious!) and we strongly recommend you look at them before investing.

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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