Insiders who purchased AU$559.4k worth of Terragen Holdings Limited (ASX:TGH) shares over the past year recouped some of their losses after price gained 13% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$144k since the time of purchase.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Non-Executive Director Scobie Dickinson Ward made the biggest insider purchase in the last 12 months. That single transaction was for AU$479k worth of shares at a price of AU$0.035 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.026). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Terragen Holdings insiders were buying shares, but not selling. 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!
See our latest analysis for Terragen Holdings
Terragen Holdings is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
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 40% of Terragen Holdings shares, worth about AU$5.2m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It doesn't really mean much that no insider has traded Terragen Holdings shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Terragen Holdings insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 3 warning signs for Terragen Holdings (2 are significant) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.