Kavango Resources Insider Confidence Rewarded, Stock Hits UK£21m Market Cap

Kavango Resources Plc (LON:KAV) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 10% resulting in a UK£2.0m addition to the company’s market value. As a result, the stock they originally bought for US$89.2k is now worth US$129.6k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Kavango Resources

The Last 12 Months Of Insider Transactions At Kavango Resources

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Matthew Turney bought UK£50k worth of shares at a price of UK£0.008 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.013. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Kavango Resources insiders bought shares during the last year, they didn't sell. They paid about UK£0.0093 on average. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

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).

Kavango Resources Insiders Bought Stock Recently

There was some insider buying at Kavango Resources over the last quarter. Independent Deputy Chairman Peter Francis Bee bought UK£29k worth of shares in that time. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Kavango Resources Boast High 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 Kavango Resources insiders own 7.0% of the company, worth about UK£1.5m. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Kavango Resources Insiders?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Kavango Resources insiders bought more shares in 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. Be aware that Kavango Resources is showing 5 warning signs in our investment analysis, and 3 of those are a bit concerning...

Of course Kavango Resources 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.

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