It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Spirit Technology Solutions Ltd. (ASX:ST1).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.

See our latest analysis for Spirit Technology Solutions

The Last 12 Months Of Insider Transactions At Spirit Technology Solutions

Over the last year, we can see that the biggest insider purchase was by insider Peter Diamond for AU$813k worth of shares, at about AU$0.23 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.30), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 18.73m shares for AU$4.5m. But insiders sold 4.06m shares worth AU$1.5m. Overall, Spirit Technology Solutions insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction! insider-trading-volume

Spirit Technology Solutions is not the only stock that insiders are buying. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.



Spirit Technology Solutions Insiders Bought Stock Recently

Over the last quarter, Spirit Technology Solutions insiders have spent a meaningful amount on shares. Overall, three insiders shelled out AU$89k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership of Spirit Technology Solutions

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 21% of Spirit Technology Solutions shares, worth about AU$41m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Spirit Technology Solutions Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Spirit Technology Solutions insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Spirit Technology Solutions. Every company has risks, and we've spotted 2 warning signs for Spirit Technology Solutions (of which 1 shouldn't be ignored!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity 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.

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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