In the last year, multiple insiders have substantially increased their holdings of Generation Development Group Limited (ASX:GDG) stock, indicating that insiders’ optimism about the company’s prospects has increased.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Generation Development Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider John Wheeler bought AU$2.9m worth of shares at a price of AU$1.47 per share. That means that an insider was happy to buy shares at above the current price of AU$1.32. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for 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.
Happily, we note that in the last year insiders paid AU$3.0m for 2.42m shares. But insiders sold 150.00k shares worth AU$178k. In the last twelve months there was more buying than selling by Generation Development Group insiders. Their average price was about AU$1.22. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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!
Generation Development Group 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.
Generation Development Group Insiders Bought Stock Recently
It’s good to see that Generation Development Group insiders have made notable investments in the company’s shares. insider John Wheeler spent AU$2.9m on stock, and there wasn’t any selling. This is a positive in our book as it implies some confidence.
Insider Ownership Of Generation Development Group
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 30% of Generation Development Group shares, worth about AU$74m. 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 Generation Development Group Insider Transactions Indicate?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Generation Development Group insiders are well aligned, and that they may think the share price is too low. 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, Generation Development Group has 2 warning signs (and 1 which is concerning) we think you should know about.
But note: Generation Development Group 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.
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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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