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AdAlta Insiders Placed Bullish Bets Worth AU$850.2k

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in AdAlta Limited's (ASX:1AD) case, it's fantastic news for shareholders.

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.

Check out our latest analysis for AdAlta

AdAlta Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Stuart Morris bought AU$530k worth of shares at a price of AU$0.11 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.022). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably Stuart Morris was also the biggest seller.

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Over the last year, we can see that insiders have bought 21.15m shares worth AU$850k. On the other hand they divested 557.90k shares, for AU$11k. In total, AdAlta insiders bought more than they sold over the last year. They paid about AU$0.04 on average. This is nice to see since it implies that insiders might see value around current prices. 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!

insider-trading-volume
insider-trading-volume

AdAlta is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

AdAlta Insiders Bought Stock Recently

Over the last quarter, AdAlta insiders have spent a meaningful amount on shares. insider Stuart Morris spent AU$530k on stock, and there wasn't any selling. This makes one think the business has some good points.

Does AdAlta Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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 19% of AdAlta shares, worth about AU$2.3m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About AdAlta Insiders?

It is good to see the recent insider purchase. 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. When combined with notable insider ownership, these factors suggest AdAlta insiders are well aligned, and that they may think the share price is too low. While we like knowing 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. When we did our research, we found 4 warning signs for AdAlta (3 are concerning!) that we believe deserve your full attention.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.