Have Insiders Sold Kip McGrath Education Centres Shares Recently?
Some Kip McGrath Education Centres Limited (ASX:KME) shareholders may be a little concerned to see that insider Storm McGrath recently sold a substantial AU$2.4m worth of stock at a price of AU$0.45 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 100% of their entire holding.
The Last 12 Months Of Insider Transactions At Kip McGrath Education Centres
In fact, the recent sale by Storm McGrath was the biggest sale of Kip McGrath Education Centres shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at slightly below the current price (AU$0.55). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Storm McGrath's holding.
Happily, we note that in the last year insiders paid AU$682k for 1.19m shares. On the other hand they divested 5.42m shares, for AU$2.4m. 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 Kip McGrath Education Centres
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Does Kip McGrath Education Centres 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Kip McGrath Education Centres insiders own about AU$7.9m worth of shares. That equates to 26% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Kip McGrath Education Centres Insider Transactions Indicate?
The stark truth for Kip McGrath Education Centres is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Kip McGrath Education Centres makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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 assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Kip McGrath Education Centres.
But note: Kip McGrath Education Centres 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.