Aerometrex Insiders Make Handsome Sum Selling Stock At AU$0.26 Per Share
While Aerometrex Limited (ASX:AMX) shareholders have had a good week with the stock up 19%, they shouldn't let their guards down. The fact that insiders chose to dispose of AU$520k worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Aerometrex
In the last twelve months, the biggest single sale by an insider was when the insider, Mark Deuter, sold AU$520k worth of shares at a price of AU$0.26 per share. That means that an insider was selling shares at slightly below the current price (AU$0.37). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 24% of Mark Deuter's holding. The only individual insider seller over the last year was Mark Deuter.
In the last twelve months insiders purchased 488.42k shares for AU$141k. On the other hand they divested 2.00m shares, for AU$520k. 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!
See our latest analysis for Aerometrex
If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.
Aerometrex Insiders Bought Stock Recently
We saw some Aerometrex insider buying shares in the last three months. Independent Non-Executive Chairman Mark Lindh purchased AU$41k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Aerometrex Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 29% of Aerometrex shares, worth about AU$10m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Aerometrex Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. We don't take much encouragement from the transactions by Aerometrex insiders. But we do like the fact that insiders own a fair chunk of the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we've found that Aerometrex has 2 warning signs (1 is a bit unpleasant!) that deserve your attention before going any further with your analysis.
But note: Aerometrex 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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