Need To Know: Kathmandu Holdings Limited (NZSE:KMD) Insiders Have Been Buying Shares

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Kathmandu Holdings Limited (NZSE:KMD), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 Kathmandu Holdings

Kathmandu Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Group CEO Xavier Simonet bought NZ$245k worth of shares at a price of NZ$0.50 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of NZ$1.29. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Kathmandu Holdings insiders may have bought shares in the last year, but they didn't sell any. They paid about NZ$0.58 on average. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Kathmandu Holdings 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.

Kathmandu Holdings Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Kathmandu Holdings. Non-Executive Independent Director Philip Bowman spent NZ$132k on stock, and there wasn't any selling. This makes one think the business has some good points.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.3% of Kathmandu Holdings shares, worth about NZ$12m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.

So What Does This Data Suggest About Kathmandu Holdings Insiders?

The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Kathmandu Holdings we think they are probably pretty confident of a bright future. 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 that end, you should learn about the 3 warning signs we've spotted with Kathmandu Holdings (including 1 which is a bit unpleasant).

Of course Kathmandu Holdings 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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