Those following along with Generation Development Group Limited (ASX:GDG) will no doubt be intrigued by the recent purchase of shares by Robert Coombe, Executive Chairman of the company, who spent a stonking AU$1.0m on stock at an average price of AU$4.15. While that only increased their holding size by 2.6%, it is still a big swing by our standards.

See our latest analysis for Generation Development Group

Generation Development Group Insider Transactions Over The Last Year

The insider, John Wheeler, made the biggest insider sale in the last 12 months. That single transaction was for AU$5.0m worth of shares at a price of AU$2.41 each. That means that an insider was selling shares at slightly below the current price (AU$4.81). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 23% of John Wheeler's stake.

In the last twelve months insiders purchased 448.51k shares for AU$1.6m. But insiders sold 5.78m shares worth AU$9.9m. All up, insiders sold more shares in Generation Development Group than they bought, over the last year. They sold for an average price of about AU$1.71. It's not particularly great to see insiders were selling shares at below recent prices. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Generation Development Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Generation Development Group Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Generation Development Group insiders own about AU$328m worth of shares (which is 18% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Generation Development Group Insiders?

The recent insider purchases are heartening. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Generation Development Group insiders are reasonably well aligned, and optimistic for the 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. You'd be interested to know, that we found 2 warning signs for Generation Development Group and we suggest you have a look.

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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