Insider Stock Buying Reaches AU$31.0m On Australian Agricultural
Over the last year, a good number of insiders have significantly increased their holdings in Australian Agricultural Company Limited (ASX:AAC). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Australian Agricultural
Australian Agricultural Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Bryan Glinton bought AU$11m worth of shares at a price of AU$1.86 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$1.50). 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. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months Australian Agricultural insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Insiders At Australian Agricultural Have Bought Stock Recently
Over the last quarter, Australian Agricultural insiders have spent a meaningful amount on shares. insider John Andrew Forrest spent AU$9.8m on stock, and there wasn't any selling. That shows some optimism about the company's future.
Does Australian Agricultural Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Australian Agricultural insiders own 73% of the company, currently worth about AU$656m based on the recent share price. 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's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Australian Agricultural insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! Of course, the future is what matters most. So if you are interested in Australian Agricultural, you should check out this free report on analyst forecasts for the company.
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 of direct interests only, but not derivative transactions or indirect interests.
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.
