Those following along with Kelsian Group Limited (ASX:KLS) will no doubt be intrigued by the recent purchase of shares by Neil Smith, Non-Executive Director of the company, who spent a stonking AU$940k on stock at an average price of AU$3.64. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 1.0%.

View our latest analysis for Kelsian Group

The Last 12 Months Of Insider Transactions At Kelsian Group

Notably, that recent purchase by Non-Executive Director Neil Smith was not the only time they bought Kelsian Group shares this year. They previously made an even bigger purchase of AU$2.4m worth of shares at a price of AU$3.92 per share. That means that an insider was happy to buy shares at above the current price of AU$3.55. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

While Kelsian Group insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Kelsian Group 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.

Insider Ownership Of Kelsian Group

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Kelsian Group insiders own about AU$110m worth of shares. That equates to 11% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Kelsian Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Kelsian Group insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Kelsian Group. To help with this, we've discovered 2 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Kelsian Group.

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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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.