Potential Servcorp Limited (ASX:SRV) shareholders may wish to note that the Founder, Alfred Moufarrige, recently bought AU$475k worth of stock, paying AU$4.75 for each share. Although the purchase only increased their holding by 3.4%, it is still a solid purchase in our view.

Check out our latest analysis for Servcorp

The Last 12 Months Of Insider Transactions At Servcorp

In fact, the recent purchase by Founder Alfred Moufarrige was not their only acquisition of Servcorp shares this year. Earlier in the year, they paid AU$4.00 per share in a AU$1.7m purchase. Even though the purchase was made at a significantly lower price than the recent price (AU$4.86), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Alfred Moufarrige purchased 728.04k shares over the year. The average price per share was AU$4.30. 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!

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

Insider Ownership Of Servcorp

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Servcorp insiders own about AU$16m worth of shares. That equates to 3.2% 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 Does This Data Suggest About Servcorp Insiders?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Servcorp we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Servcorp and understanding this should be part of your investment process.

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.