Allegiance Coal Limited (ASX:AHQ) Insiders Increased Their Holdings
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 Allegiance Coal Limited (ASX:AHQ).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for Allegiance Coal
Allegiance Coal Insider Transactions Over The Last Year
While no particular insider transaction stood out, we can still look at the overall trading.
Over the last year, we can see that insiders have bought 3.41m shares worth AU$180k. Overall, Allegiance Coal insiders were net buyers last year. Their average price was about AU$0.053. I’d consider this a positive as it suggests insiders see value at around the current price, which is AU$0.052. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Allegiance Coal Have Bought Stock Recently
We saw some Allegiance Coal insider buying shares in the last three months. Mark Gray purchased AU$30k worth of shares in that period. We like it when there are only buyers, and no sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Insider Ownership of Allegiance Coal
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 22% of Allegiance Coal shares, worth about AU$5.2m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Allegiance Coal Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But the difference isn’t much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Allegiance Coal and we see no evidence to suggest they are worried about the future. Along with insider transactions, I recommend checking if Allegiance Coal is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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