Those following along with Ariadne Australia Limited (ASX:ARA) will no doubt be intrigued by the recent purchase of shares by Kevin Seymour, Non-Executive Deputy Chairman of the company, who spent a stonking AU$1.2m on stock at an average price of AU$0.50. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 8.4%.
The Last 12 Months Of Insider Transactions At Ariadne Australia
Notably, that recent purchase by Kevin Seymour is the biggest insider purchase of Ariadne Australia shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of AU$0.48. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. 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.
Ariadne Australia insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Ariadne Australia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Ariadne Australia
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. Ariadne Australia insiders own about AU$61m worth of shares (which is 64% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Ariadne Australia Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ariadne Australia. One for the watchlist, at least! 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. In terms of investment risks, we've identified 3 warning signs with Ariadne Australia and understanding these should be part of your investment process.
But note: Ariadne Australia 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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