Need To Know: Webstep ASA (OB:WSTEP) Insiders Have Been Buying Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Webstep ASA (OB:WSTEP), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. 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'.

Check out our latest analysis for Webstep

The Last 12 Months Of Insider Transactions At Webstep

Notably, that recent purchase by Trond Johannessen is the biggest insider purchase of Webstep shares that we've seen in the last year. That means that even when the share price was higher than kr22.40 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Happily, we note that in the last year insiders paid kr984k for 47.20k shares. But they sold 5.00k shares for kr74k. In the last twelve months there was more buying than selling by Webstep 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Webstep Insiders Bought Stock Recently

We saw some Webstep insider buying shares in the last three months. Executive Chairman Trond Johannessen bought kr403k worth of shares in that time. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Webstep insiders have about 2.2% of the stock, worth approximately kr13m. However, it's possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Webstep Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Webstep shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Webstep. Our analysis shows 3 warning signs for Webstep (1 doesn't sit too well with us!) and we strongly recommend you look at these before investing.

Of course Webstep 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, 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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