We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Spark New Zealand Limited (NZSE:SPK), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Spark New Zealand

The Last 12 Months Of Insider Transactions At Spark New Zealand

Over the last year, we can see that the biggest insider sale was by the insider, Matthew Sheppard, for NZ$133k worth of shares, at about NZ$4.57 per share. That means that even when the share price was below the current price of NZ$4.79, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 62% of Matthew Sheppard's holding. The only individual insider seller over the last year was Matthew Sheppard.

In the last twelve months insiders purchased 48.00k shares for NZ$226k. On the other hand they divested 29.16k shares, for NZ$133k. In the last twelve months there was more buying than selling by Spark New Zealand insiders. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Spark New Zealand Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Spark New Zealand. Specifically, insider Matthew Sheppard ditched NZ$133k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Spark New Zealand Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Spark New Zealand insiders own 0.07% of the company, worth about NZ$6.2m. I generally like to see higher levels of ownership.

So What Does This Data Suggest About Spark New Zealand Insiders?

An insider sold Spark New Zealand shares recently, but they didn't buy any. But we take heart from prior transactions. Still, insiders don't own a great deal of the stock. So overall it's hard to argue insiders are bullish. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Spark New Zealand has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.

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.

This article by Simply Wall St is general in nature. 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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