Pleasing Signs As A Number Of Insiders Buy Advanced Braking Technology Stock
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Advanced Braking Technology Limited (ASX:ABV), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Advanced Braking Technology
The Last 12 Months Of Insider Transactions At Advanced Braking Technology
In the last twelve months, the biggest single purchase by an insider was when insider Keith Knowles bought AU$320k worth of shares at a price of AU$0.044 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.058), 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.
In the last twelve months insiders purchased 8.91m shares for AU$399k. On the other hand they divested 5.43m shares, for AU$238k. In the last twelve months there was more buying than selling by Advanced Braking Technology insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Advanced Braking Technology 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.
Advanced Braking Technology Insiders Bought Stock Recently
There was some insider buying at Advanced Braking Technology over the last quarter. insider Keith Knowles bought AU$62k worth in that time. On the other hand, insider Keith Knowles sold AU$9.1k worth of shares. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Advanced Braking Technology insiders own 51% of the company, worth about AU$11m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Advanced Braking Technology Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Advanced Braking Technology insiders are well aligned, and quite possibly think the share price is too low. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Advanced Braking Technology. To that end, you should learn about the 2 warning signs we've spotted with Advanced Braking Technology (including 1 which is potentially serious).
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com