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Insider Buying: John Andrew Forrest Just Spent AU$31m On Australian Agricultural Company Limited (ASX:AAC) Shares

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Those following along with Australian Agricultural Company Limited (ASX:AAC) will no doubt be intrigued by the recent purchase of shares by insider John Andrew Forrest, who spent a stonking AU$31m on stock at an average price of AU$1.97. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 49%.

View our latest analysis for Australian Agricultural

The Last 12 Months Of Insider Transactions At Australian Agricultural

In fact, the recent purchase by insider John Andrew Forrest was not their only acquisition of Australian Agricultural shares this year. Earlier in the year, they paid AU$1.11 per share in a AU$35m purchase. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$2.06. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

John Andrew Forrest purchased 47.60m shares over the year. The average price per share was AU$1.39. You can see the insider transactions (by companies and 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!


Australian Agricultural is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Australian Agricultural Boast High Insider Ownership?

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. Australian Agricultural insiders own about AU$707m worth of shares (which is 57% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Australian Agricultural Insiders?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Australian Agricultural. Nice! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Our analysis shows 2 warning signs for Australian Agricultural (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

But note: Australian Agricultural 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.