Over the last year, a good number of insiders have significantly increased their holdings in SiteMinder Limited (ASX:SDR). This is encouraging because it indicates that insiders are more optimistic about the company’s prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
SiteMinder Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Michael Ford bought AU$13m worth of shares at a price of AU$3.15 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$3.85), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
Happily, we note that in the last year insiders paid AU$13m for 4.14m shares. But they sold 4.00m shares for AU$13m. In the last twelve months there was more buying than selling by SiteMinder 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!
SiteMinder is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. SiteMinder insiders own about AU$165m worth of shares (which is 16% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At SiteMinder Tell Us?
The fact that there have been no SiteMinder insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, SiteMinder insiders feel good about the company’s 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. You’d be interested to know, that we found 1 warning sign for SiteMinder and we suggest you have a look.
Of course SiteMinder 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. 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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