While Wrkr Ltd (ASX:WRK) shareholders have had a good week with the stock up 13%, insiders can't say the same having sold stock over the past year. They could have sold their shares at much higher prices and gotten a better return on their investment if they had waited.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
In the last twelve months, the biggest single sale by an insider was when the insider, Donald Sharp, sold AU$367k worth of shares at a price of AU$0.07 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.14. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 4.4% of Donald Sharp's stake. The only individual insider seller over the last year was Donald Sharp. Notably Donald Sharp was also the biggest buyer, having purchased AU$41k worth of shares.
Happily, we note that in the last year insiders paid AU$41k for 439.34k shares. But insiders sold 3.47m shares worth AU$367k. 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!
View our latest analysis for Wrkr
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
For a common shareholder, it is worth checking how many shares are held by company 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. It appears that Wrkr insiders own 31% of the company, worth about AU$80m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Wrkr in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Wrkr may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.