Last week, Octave Specialty Group, Inc. (NYSE:AMBC) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 22% last week, resulting in a US$87m increase in the company's market worth, implying a 47% gain on their initial purchase. Put another way, the original US$1.25m acquisition is now worth US$1.83m.
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 Octave Specialty Group
The Independent Director Michael Price made the biggest insider purchase in the last 12 months. That single transaction was for US$500k worth of shares at a price of US$6.54 each. We do like to see buying, but this purchase was made at well below the current price of US$10.08. 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.
While Octave Specialty 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!
See our latest analysis for Octave Specialty Group
Octave Specialty 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.
Insiders At Octave Specialty Group Have Bought Stock Recently
It's good to see that Octave Specialty Group insiders have made notable investments in the company's shares. President Claude LeBlanc spent US$214k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Octave Specialty Group insiders own 6.3% of the company, worth about US$25m. 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 Octave Specialty 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. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Octave Specialty Group insiders are well aligned, and that they may think the share price is too low. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Octave Specialty Group.
But note: Octave Specialty Group 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.