Independent Non-Executive Chairman of Smartgroup Picks Up 21% More Stock
Investors who take an interest in Smartgroup Corporation Ltd (ASX:SIQ) should definitely note that the Independent Non-Executive Chairman, John Prendiville, recently paid AU$6.95 per share to buy AU$174k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 21%.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Notably, that recent purchase by Independent Non-Executive Chairman John Prendiville was not the only time they bought Smartgroup shares this year. Earlier in the year, they paid AU$8.34 per share in a AU$584k purchase. That means that an insider was happy to buy shares at above the current price of AU$7.09. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. 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.
Smartgroup insiders may have bought shares in the last year, but they didn't sell any. 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!
Check out our latest analysis for Smartgroup
Smartgroup is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Smartgroup insiders own about AU$38m worth of shares. That equates to 4.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Smartgroup we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Smartgroup has 1 warning sign we think you should be aware of.
Of course Smartgroup 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 of direct interests only, but not derivative transactions or indirect interests.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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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