Eureka Group Holdings Limited (ASX:EGH) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 10%, resulting in a AU$30m rise in the company's market capitalisation, translating to a gain of 48% on their initial investment. As a result, their original purchase of AU$334.5k worth of stock is now worth AU$494.0k.
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.
The Last 12 Months Of Insider Transactions At Eureka Group Holdings
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director John Whiteman bought AU$248k worth of shares at a price of AU$0.50 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.74. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
John Whiteman bought 663.12k shares over the last 12 months at an average price of AU$0.50. 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!
See our latest analysis for Eureka Group Holdings
Eureka Group Holdings is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Eureka Group Holdings Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Eureka Group Holdings insiders own 3.6% of the company, worth about AU$11m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Eureka Group Holdings Insiders?
It doesn't really mean much that no insider has traded Eureka Group Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Eureka Group Holdings and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 2 warning signs (1 is a bit unpleasant!) that you ought to be aware of before buying any shares in Eureka Group Holdings.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list 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 of direct interests only, but not derivative transactions or indirect interests.
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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.