When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Ondo InsurTech Plc’s (LON:ONDO) instance, it’s good news for shareholders.
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.
See our latest analysis for Ondo InsurTech
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Gregory Wood for UK£49k worth of shares, at about UK£0.15 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.37. 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.
Happily, we note that in the last year insiders paid UK£75k for 510.80k shares. But they sold 137.93k shares for UK£20k. In total, Ondo InsurTech insiders bought more than they sold over the last year. 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!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. We usually like to see fairly high levels of insider ownership. Our data indicates that Ondo InsurTech insiders own about UK£5.6m worth of shares (which is 12% of the company). However, it’s possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it’d be more encouraging if Ondo InsurTech insiders bought more shares in the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Ondo InsurTech. At Simply Wall St, we’ve found that Ondo InsurTech has 6 warning signs (3 are a bit concerning!) that deserve your attention before going any further with your analysis.
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