Tinybeans Group Limited (ASX:TNY) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 30%, resulting in a AU$4.3m rise in the company's market capitalisation. In other words, the original US$268k purchase is now worth US$429k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Tinybeans Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Paul Isaac bought AU$265k worth of shares at a price of AU$1.84 per share. That means that an insider was happy to buy shares at above the current price of AU$0.30. 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.
While Tinybeans Group insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.19. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Have Tinybeans Group Insiders Traded Recently?
We've only seen a tiny insider purchase valued at AU$3.8k, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.
Insider Ownership Of Tinybeans Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that Tinybeans Group insiders own 40% of the company, worth about AU$7.4m. 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 Tinybeans Group Insiders?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. It would be great to see more insider buying, but overall it seems like Tinybeans Group insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tinybeans Group. When we did our research, we found 4 warning signs for Tinybeans Group (2 are a bit concerning!) that we believe deserve your full attention.
But note: Tinybeans Group 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, but not derivative transactions.
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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.
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