Even if it's not a huge purchase, we think it was good to see that Jay Hughes, a Atrum Coal Limited (ASX:ATU) insider, recently shelled out AU$120k to buy stock, at AU$0.006 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 36%.
Atrum Coal Insider Transactions Over The Last Year
Notably, that recent purchase by insider Jay Hughes was not the only time they bought Atrum Coal shares this year. They previously made an even bigger purchase of AU$123k worth of shares at a price of AU$0.019 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.007). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Jay Hughes was the only individual insider to buy during the last year.
Jay Hughes bought a total of 26.66m shares over the year at an average price of AU$0.0091. 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!
Atrum Coal 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.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Atrum Coal insiders own 44% of the company, currently worth about AU$2.8m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Atrum Coal Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Atrum Coal. Looks promising! 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. Our analysis shows 6 warning signs for Atrum Coal (5 are a bit concerning!) and we strongly recommend you look at them before investing.
But note: Atrum Coal 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here