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How Many ASX Limited (ASX:ASX) Shares Did Insiders Buy, In The Last Year?

Simply Wall St

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in ASX Limited (ASX:ASX).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. 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'.

Check out our latest analysis for ASX

The Last 12 Months Of Insider Transactions At ASX

In the last twelve months, the biggest single purchase by an insider was when insider Robert Woods bought AU$246k worth of shares at a price of AU$81.95 per share. So it's clear an insider wanted to buy, at around the current price, which is AU$82.40. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for ASX share holders is that insiders were buying at near the current price.

ASX insiders may have bought shares in the last year, but they didn't sell any. 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!

ASX:ASX Recent Insider Trading April 29th 2020
ASX:ASX Recent Insider Trading April 29th 2020

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

Insiders at ASX Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at ASX. Not only was there no selling that we can see, but they collectively bought AU$328k worth of shares. That shows some optimism about the company's future.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ASX insiders own 0.5% of the company, worth about AU$81m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The ASX Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of ASX we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course ASX 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.