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Great news for GUD Holdings Limited (ASX:GUD): Insiders acquired stock in large numbers last year

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of GUD Holdings Limited (ASX:GUD), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for GUD Holdings

GUD Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director John Pollaers bought AU$101k worth of shares at a price of AU$11.18 per share. That means that even when the share price was higher than AU$7.31 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

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Happily, we note that in the last year insiders paid AU$320k for 32.21k shares. But insiders sold 2.43k shares worth AU$21k. In the last twelve months there was more buying than selling by GUD Holdings insiders. Their average price was about AU$9.93. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At GUD Holdings Have Bought Stock Recently

There has been significantly more insider buying, than selling, at GUD Holdings, over the last three months. In total, three insiders bought AU$131k worth of shares in that time. But we did see CEO, MD & Director Graeme Whickman sell shares worth AU$21k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership Of GUD Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own AU$2.0m worth of GUD Holdings stock, about 0.2% of the company. I generally like to see higher levels of ownership.

So What Do The GUD Holdings Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on GUD Holdings stock. 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. Be aware that GUD Holdings is showing 5 warning signs in our investment analysis, and 1 of those is a bit concerning...

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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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