Who Has Been Buying Adherium Limited (ASX:ADR) Shares?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Adherium Limited (ASX:ADR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for Adherium
The Last 12 Months Of Insider Transactions At Adherium
insider James Middleweek made the biggest insider purchase in the last 12 months. That single transaction was for AU$187k worth of shares at a price of AU$0.036 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.016). 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. James Middleweek was the only individual insider to buy shares in the last twelve months. We note that James Middleweek was both the biggest buyer and the biggest seller.
James Middleweek purchased 7.48m shares over the year. The average price per share was AU$0.028. 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!
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).
Adherium Insiders Are Selling The Stock
We have seen a bit of insider selling at Adherium, over the last three months. insider James Middleweek sold just AU$44k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the amount sold isn't enough for us to put any weight on it.
Insider Ownership of Adherium
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Adherium insiders own 11% of the company, worth about AU$830k. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Adherium Insider Transactions Indicate?
While there has not been any insider buying in the last three months, there has been selling. But the sales were small, so we're not concerned. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Adherium insiders are doubting the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Adherium. Every company has risks, and we've spotted 6 warning signs for Adherium (of which 3 don't sit too well with us!) you should know about.
Of course Adherium may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 editorial-team@simplywallst.com. 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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