More Money In The Bank For Aluula Composites Insiders Who Divested CA$2.1m
While it’s been a great week for Aluula Composites Inc. (CVE:AUUA) shareholders after stock gained 11%, they should consider it with a grain of salt. Even though stock prices were relatively low, insiders elected to sell CA$2.1m worth of stock in the last year, which could indicate some expected downturn.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Aluula Composites Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Founder & Director, Richard Myerscough, for CA$2.1m worth of shares, at about CA$3.30 per share. That means that an insider was selling shares at slightly below the current price (CA$3.90). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 10% of Richard Myerscough's stake. Richard Myerscough was the only individual insider to sell over the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Check out our latest analysis for Aluula Composites
I will like Aluula Composites better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Aluula Composites Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Aluula Composites. In total, Founder & Director Richard Myerscough sold CA$2.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Insider Ownership Of Aluula Composites
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Aluula Composites insiders own 42% of the company, worth about CA$48m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Aluula Composites Insiders?
An insider hasn't bought Aluula Composites stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Our analysis shows 4 warning signs for Aluula Composites (1 is potentially serious!) and we strongly recommend you look at them before investing.
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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