Yahoo Finance AustChina Holdings Limited (ASX:AUH) is up 14%, while insiders who purchased AU$2.2m are up 28%
AustChina Holdings Limited (ASX:AUH) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a AU$2.0m rise in the company's market capitalisation. In other words, the original AU$2.2m purchase is now worth AU$2.8m.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for AustChina Holdings
The Last 12 Months Of Insider Transactions At AustChina Holdings
Over the last year, we can see that the biggest insider purchase was by insider Peter Proksa for AU$703k worth of shares, at about AU$0.01 per share. That means that even when the share price was higher than AU$0.008 (the recent price), an insider wanted to purchase shares. 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. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Peter Proksa.
Peter Proksa bought 346.14m shares over the last 12 months at an average price of AU$0.0062. 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!
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).
Insider Ownership Of AustChina Holdings
Many investors like to check how much of a company is owned by 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. Our data indicates that AustChina Holdings insiders own about AU$2.0m worth of shares (which is 12% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The AustChina Holdings Insider Transactions Indicate?
The recent insider purchase is heartening. 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. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that AustChina Holdings insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for AustChina Holdings (of which 2 shouldn't be ignored!) you should know about.
But note: AustChina Holdings 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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