Yahoo Finance Read This Before Selling Austin Engineering Limited (ASX:ANG) Shares
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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Austin Engineering Limited (ASX:ANG).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Austin Engineering
Austin Engineering Insider Transactions Over The Last Year
There wasn’t any very large single transaction over the last year, but we can still observe some trading.
In the last twelve months insiders paid AU$164k for 714.50k shares purchased. In total, Austin Engineering insiders bought more than they sold over the last year. They paid about AU$0.23 on average. This is nice to see since it implies that insiders might see value around current prices (around AU$0.22). 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!
Austin Engineering is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Austin Engineering Insiders Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Austin Engineering. Peter Forsyth purchased AU$66k worth of shares in that period. We like it when there are only buyers, and no sellers. However, in this case the amount invested recently is quite small.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own AU$3.0m worth of Austin Engineering stock, about 2.4% of the company. But they may have an indirect interest through a corporate structure that we haven’t picked up on. I generally like to see higher levels of ownership.
So What Do The Austin Engineering Insider Transactions Indicate?
It is good to see recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Austin Engineering insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Austin Engineering 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
