Insider Buying: The GameStop Corp. (NYSE:GME) Independent Director Just Bought 16% More Shares

Investors who take an interest in GameStop Corp. (NYSE:GME) should definitely note that the Independent Director, Lawrence Cheng, recently paid US$22.80 per share to buy US$114k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 16%.

See our latest analysis for GameStop

The Last 12 Months Of Insider Transactions At GameStop

In fact, the recent purchase by Lawrence Cheng was the biggest purchase of GameStop shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$22.35 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Lawrence Cheng was the only individual insider to buy during the last year.

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!

GameStop is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does GameStop Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that GameStop insiders own 12% of the company, worth about US$843m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At GameStop Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest GameStop insiders are well aligned, and quite possibly think the share price is too low. Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 2 warning signs for GameStop and we suggest you have a look.

But note: GameStop 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, 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.

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