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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Keras Resources Plc (LON:KRS), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
The Last 12 Months Of Insider Transactions At Keras Resources
The Founder, Russell Lamming, made the biggest insider sale in the last 12 months. That single transaction was for UK£50k worth of shares at a price of UK£0.0011 each. So what is clear is that an insider saw fit to sell at around the current price of UK£0.001. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. The only individual insider seller over the last year was Russell Lamming. Notably Russell Lamming was also the biggest buyer, having purchased UK£56k worth of shares.
In the last twelve months insiders purchased 48.57m shares for UK£56k. But they sold 45.58m shares for UK£50k. In total, Keras Resources insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Keras Resources 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.
Insiders at Keras Resources Have Sold Stock Recently
We have seen a bit of insider selling at Keras Resources, over the last three months. UK£50k worth of shares were sold by Founder Russell Lamming. But at least we saw UK£41k worth of buying. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 22% of Keras Resources shares, worth about UK£1.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Keras Resources Insiders?
Our data shows a little more insider selling than buying in the last three months. But the difference isn't enough to have us worried. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Keras Resources insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 4 warning signs for Keras Resources (2 make us uncomfortable!) and we strongly recommend you look at these before investing.
Of course Keras Resources 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.
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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