Favourable Signals For SenSen Networks: Numerous Insiders Acquired Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in SenSen Networks Limited's (ASX:SNS) case, it's fantastic news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for SenSen Networks

SenSen Networks Insider Transactions Over The Last Year

The Founder Subhash Challa made the biggest insider purchase in the last 12 months. That single transaction was for AU$282k worth of shares at a price of AU$0.04 each. That means that even when the share price was higher than AU$0.036 (the recent price), an insider wanted to purchase shares. 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. 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 SenSen Networks insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.035. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At SenSen Networks Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at SenSen Networks. We can see that Non-Executive Chairman Mark Ronald Brayan paid AU$159k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that SenSen Networks insiders own 33% of the company, worth about AU$9.2m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At SenSen Networks Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in SenSen Networks shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that SenSen Networks has 4 warning signs (2 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course SenSen Networks 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.