Those following along with The GEO Group, Inc. (NYSE:GEO) will no doubt be intrigued by the recent purchase of shares by George Zoley, Founder & Executive Chairman of the Board of the company, who spent a stonking US$3.1m on stock at an average price of US$12.28. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 6.6%.

View our latest analysis for GEO Group

The Last 12 Months Of Insider Transactions At GEO Group

Notably, that recent purchase by George Zoley is the biggest insider purchase of GEO Group shares that we've seen in the last year. That implies that an insider found the current price of US$13.02 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. The only individual insider to buy over the last year was George Zoley.

George Zoley bought 300.00k shares over the last 12 months at an average price of US$12.32. 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!

GEO 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.

Does GEO 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that GEO Group insiders own 3.8% of the company, worth about US$67m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The GEO 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. Given that insiders also own a fair bit of GEO Group 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. To help with this, we've discovered 4 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in GEO Group.

But note: GEO 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.