Bullish insiders bet AU$1.4m on Australian Finance Group Limited (ASX:AFG)
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Australian Finance Group Limited (ASX:AFG), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Australian Finance Group
Australian Finance Group Insider Transactions Over The Last Year
The Independent Non-Executive Director Craig Carter made the biggest insider purchase in the last 12 months. That single transaction was for AU$617k worth of shares at a price of AU$2.58 each. That means that even when the share price was higher than AU$1.48 (the recent price), an insider wanted to purchase shares. 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.
Happily, we note that in the last year insiders paid AU$1.4m for 599.29k shares. But insiders sold 400.00k shares worth AU$608k. Overall, Australian Finance Group insiders were net buyers during the last year. You can see the insider transactions (by companies and 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!
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.
Australian Finance Group Insiders Are Selling The Stock
Over the last three months, we've seen significant insider selling at Australian Finance Group. In total, Co-Founder & Non-Executive Director Malcolm Watkins sold AU$608k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Australian Finance Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Australian Finance Group insiders own 24% of the company, worth about AU$96m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Australian Finance Group Insider Transactions Indicate?
An insider sold stock recently, but they haven't been buying. On the other hand, the insider transactions over the last year are encouraging. And insiders do own shares. So we're happy enough to look past some selling. 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. Case in point: We've spotted 4 warning signs for Australian Finance Group you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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