With Love Group Global Up 20%, Insider Buyers Count Their Returns
Last week, Love Group Global Ltd (ASX:LVE) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 20% last week, resulting in a AU$811k increase in the company's market worth, implying a 20% gain on their initial purchase. In other words, the original AU$164.0k purchase is now worth AU$196.8k.
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.
The Last 12 Months Of Insider Transactions At Love Group Global
In fact, the recent purchase by Founder Michael Ye was not their only acquisition of Love Group Global shares this year. They previously made an even bigger purchase of AU$120k worth of shares at a price of AU$0.10 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.12. 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.
Michael Ye bought a total of 1.64m shares over the year at an average price of AU$0.10. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Love Group Global
Love Group Global 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 Love Group Global Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Love Group Global insiders own 47% of the company, worth about AU$2.3m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Love Group Global Insiders?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Love Group Global insiders feel good about the company's future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Love Group Global has 3 warning signs (and 2 which can't be ignored) we think you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list 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 of direct interests only, but not derivative transactions or indirect interests.
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