Insiders Rewarded With AU$1.0m Addition To Investment As Kaiser Reef Stock Hits AU$175m

Kaiser Reef Limited (ASX:KAU) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 13%, resulting in a AU$21m rise in the company's market capitalisation, translating to a gain of 106% on their initial investment. Put another way, the original AU$984.1k acquisition is now worth AU$2.02m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Kaiser Reef

Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Steven Formica for AU$350k worth of shares, at about AU$0.14 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.29. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Kaiser Reef insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Kaiser Reef

Kaiser Reef is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Does Kaiser Reef Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 15% of Kaiser Reef shares, worth about AU$26m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Kaiser Reef Insiders?

The fact that there have been no Kaiser Reef insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. Insiders own shares in Kaiser Reef and we see no evidence to suggest they are worried about the 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. Case in point: We've spotted 2 warning signs for Kaiser Reef you should be aware of.

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.