Whilst it may not be a huge deal, we thought it was good to see that the Hotel Property Investments (ASX:HPI) Independent Non-Executive Director, Lachlan Edwards, recently bought AU$81k worth of stock, for AU$3.50 per share. Although the purchase is not a big one, increasing their shareholding by only 7.1%, it can be interpreted as a good sign.

See our latest analysis for Hotel Property Investments

The Last 12 Months Of Insider Transactions At Hotel Property Investments

Notably, that recent purchase by Lachlan Edwards is the biggest insider purchase of Hotel Property Investments shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of AU$3.50. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Lachlan Edwards was the only individual insider to buy during the last year.

Lachlan Edwards bought 117.53k shares over the last 12 months at an average price of AU$3.17. 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! insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this freelist of growing companies that insiders are buying.

Does Hotel Property Investments Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 1.3% of Hotel Property Investments shares, worth about AU$8.8m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. We do generally prefer see higher levels of insider ownership.



So What Do The Hotel Property Investments Insider Transactions Indicate?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Hotel Property Investments insiders are expecting 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. Every company has risks, and we've spotted 5 warning signs for Hotel Property Investments (of which 2 are a bit concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting 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. 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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