Insiders of Santam Ltd (JSE:SNT) are up 6.4% on their R11m purchase after Santam Ltd (JSE:SNT) rose 5.1% last week

Santam Ltd (JSE:SNT) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 5.1% resulting in a R1.4b addition to the company’s market value. As a result, the stock they originally bought for R11m is now worth R11m.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Santam

The Last 12 Months Of Insider Transactions At Santam

The CFO, Executive Head of ART Hendrik Nel made the biggest insider purchase in the last 12 months. That single transaction was for R5.3m worth of shares at a price of R242 each. That means that an insider was happy to buy shares at around the current price of R257. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.

In the last twelve months insiders purchased 44.39k shares for R11m. But they sold 16.82k shares for R4.5m. In the last twelve months there was more buying than selling by Santam insiders. 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!

Santam 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.

Insider Ownership of Santam

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own R15m worth of Santam stock, about 0.05% of the company. We consider this fairly low insider ownership.

So What Do The Santam Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Santam shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Santam and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Santam. Case in point: We've spotted 1 warning sign for Santam you should be aware of.

But note: Santam may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.

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