Several Insiders Invested In Genetic Signatures Flagging Positive News
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Genetic Signatures Limited's (ASX:GSS) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Genetic Signatures
The Last 12 Months Of Insider Transactions At Genetic Signatures
The Independent Non-Executive Chairman Nickolaos Samaras made the biggest insider purchase in the last 12 months. That single transaction was for AU$129k worth of shares at a price of AU$0.75 each. So it's clear an insider wanted to buy, at around the current price, which is AU$0.76. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Genetic Signatures share holders is that insiders were buying at near the current price. Notably Nickolaos Samaras was also the biggest seller.
Over the last year, we can see that insiders have bought 458.50k shares worth AU$299k. But insiders sold 46.89k shares worth AU$35k. In total, Genetic Signatures insiders bought more than they sold over the last year. The average buy price was around AU$0.65. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Genetic Signatures Insiders Bought Stock Recently
Over the last three months, we've seen significantly more insider buying, than insider selling, at Genetic Signatures. Insiders spent AU$223k on shares. On the other hand, Independent Non-Executive Chairman Nickolaos Samaras netted AU$35k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership Of Genetic Signatures
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own AU$3.3m worth of Genetic Signatures stock, about 1.9% of the company. We consider this fairly low insider ownership.
What Might The Insider Transactions At Genetic Signatures Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Genetic Signatures insiders are reasonably well aligned, and optimistic for the future. 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. Case in point: We've spotted 2 warning signs for Genetic Signatures you should be aware of, and 1 of them doesn't sit too well with us.
Of course Genetic Signatures may not be the best stock to buy. So you may wish to see this free collection 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 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