Positive Signs As Multiple Insiders Buy Spacetalk Stock

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Spacetalk Limited's (ASX:SPA) instance, it's good news for shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Spacetalk

The Last 12 Months Of Insider Transactions At Spacetalk

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Georg Chmiel bought AU$194k worth of shares at a price of AU$0.028 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.023). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Georg Chmiel was both the biggest buyer and the biggest seller.

In the last twelve months insiders purchased 19.74m shares for AU$452k. On the other hand they divested 3.37m shares, for AU$94k. In the last twelve months there was more buying than selling by Spacetalk insiders. Their average price was about AU$0.023. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!

Spacetalk is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Spacetalk insiders own 14% of the company, worth about AU$1.6m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Spacetalk Insiders?

The fact that there have been no Spacetalk insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Spacetalk insiders bought more shares in 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. To help with this, we've discovered 5 warning signs (4 shouldn't be ignored!) that you ought to be aware of before buying any shares in Spacetalk.

Of course Spacetalk 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.