Insider Buying: Neil Marais Just Spent UK£537k On Stenprop Limited (JSE:STP) Shares

Whilst it may not be a huge deal, we thought it was good to see that Neil Marais, who is a company insider, recently bought R537k worth of stock, for R26.51 per share. However, it only increased their shares held by 5.9%, and it wasn't a huge purchase by absolute value, either.

View our latest analysis for Stenprop

Stenprop Insider Transactions Over The Last Year

The Non-Executive Director, Patricia Watson, made the biggest insider sale in the last 12 months. That single transaction was for R1.7m worth of shares at a price of R24.90 each. That means that an insider was selling shares at slightly below the current price (R26.99). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 1.4% of Patricia Watson's stake.

Over the last year, we can see that insiders have bought 101.82k shares worth R2.6m. On the other hand they divested 289.96k shares, for R7.0m. Over the last year we saw more insider selling of Stenprop shares, than buying. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Stenprop 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. It appears that Stenprop insiders own 8.7% of the company, worth about R665m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Stenprop Insider Transactions Indicate?

The stark truth for Stenprop is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Stenprop is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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 that end, you should learn about the 4 warning signs we've spotted with Stenprop (including 1 which is a bit concerning).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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