Quite a few insiders have dramatically grown their holdings in Service Stream Limited (ASX:SSM) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Service Stream

The Last 12 Months Of Insider Transactions At Service Stream

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Thomas Coen bought AU$1.2m worth of shares at a price of AU$0.90 per share. That means that an insider was happy to buy shares at above the current price of AU$0.82. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Service Stream insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below! insider-trading-volume

Service Stream is not the only stock that insiders are buying. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of Service Stream

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. Insiders own 12% of Service Stream shares, worth about AU$54m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.



So What Do The Service Stream Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Service Stream shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Service Stream and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Service Stream.

Of course Service Stream may not be the best stock to buy. So you may wish to see this freecollection of high quality 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.

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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.