Over the last year, a good number of insiders have significantly increased their holdings in Humm Group Limited (ASX:HUM). 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, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Humm Group

Humm Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Founding Non-Independent Non-Executive Director Andrew Abercrombie for AU$921k worth of shares, at about AU$0.92 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.78). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Humm Group insiders were buying shares, but not selling. 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! insider-trading-volume

Humm Group is not the only stock insiders are buying. So take a peek at this freelist of growing companies with insider buying.

Insider Ownership of Humm Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Humm Group insiders own about AU$100m worth of shares. That equates to 26% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.



What Might The Insider Transactions At Humm Group Tell Us?

The fact that there have been no Humm Group insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Humm Group insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Humm Group. While conducting our analysis, we found that Humm Group has 2 warning signs and it would be unwise to ignore them.

But note: Humm Group may not be the best stock to buy. So take a peek at this freelist 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.