Multiple insiders bought Adore Beauty Group Limited (ASX:ABY) stock earlier this year, a positive sign for shareholders
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Adore Beauty Group Limited's (ASX:ABY) case, it's fantastic news for shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Adore Beauty Group
Adore Beauty Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Justin Ryan bought AU$190k worth of shares at a price of AU$4.92 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$2.14). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Adore Beauty Group insiders were buying shares, but not selling. Their average price was about AU$4.03. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Adore Beauty Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Adore Beauty Group Insiders Bought Stock Recently
We saw some Adore Beauty Group insider buying shares in the last three months. Independent Chair of the Board Marina Go purchased AU$48k worth of shares in that period. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Adore Beauty Group insiders own 26% of the company, worth about AU$52m. 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 Does This Data Suggest About Adore Beauty Group Insiders?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Adore Beauty Group and we see no evidence to suggest they are worried about the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Adore Beauty Group. Case in point: We've spotted 2 warning signs for Adore Beauty Group you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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.
