Yahoo Finance Should You Take Comfort From Insider Transactions At Australian Agricultural Projects Ltd (ASX:AAP)?
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Australian Agricultural Projects Ltd (ASX:AAP).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for Australian Agricultural Projects
Australian Agricultural Projects Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Non Executive Director Daniel Stefanetti for AU$122k worth of shares, at about AU$0.01 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.027), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months Australian Agricultural Projects insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Australian Agricultural Projects is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Australian Agricultural Projects 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Australian Agricultural Projects insiders own 47% of the company, currently worth about AU$3.9m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Australian Agricultural Projects Tell Us?
The fact that there have been no Australian Agricultural Projects insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Australian Agricultural Projects insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Australian Agricultural Projects. You'd be interested to know, that we found 5 warning signs for Australian Agricultural Projects and we suggest you have a look.
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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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